This question about foreclosure and property taxes came in recently. The person asking the question said later that they wanted to keep the house. So Generally, I laid out the options when facing foreclosure.

Here is the question:

We haven’t paid our property taxes for the past 2 years (lack of funds and no escrow account) We fell behind on our mortgage payments and were put into beginning stages of foreclosure. I have the money to pay my missed payments but the would not let me pay with the escrow shortage. They now want 20,000. What are my options?

Here is my answer:

You haven’t said what your goal is. Do you want to try to save your house? If so, you’d need to have enough income to make your mortgage payments, plus a Chapter 13 payment to catch up. Or, you can try a loan modification, but it would only be granted if the bank agrees, after a long process. If you want to let the house go, you have other options, such as Chapter 7 bankruptcy, to eliminate any difference between the auction price and the balance you owe on your loan.

You should consult with an attorney to review your financial situation and discuss your best options.

Daniel J. Winter
BankruptcyLawChicago.com
djw@DWinterlaw.com
312-789-9999
Offices in Chicago, Gurnee, Oak Lawn, and Skokie, Illinois