Lender Can Enforce a Foreclosure Deficiency Judgment Against You in Illinois Even if It’s From Another State

by
Richard Fonfrias, J.D.
Chicago’s Financial Rescue & Bankruptcy Lawyer
Fonfrias Law Group, LLC

If a lender gets a deficiency judgment against you in another state, don’t think that you can escape without paying it by coming to Illinois. Your debt from a foreclosure deficiency judgment will follow you. An Illinois financial rescue attorney can will advice you of your rights in this matter.

To clarify, a “deficiency judgment” is a judgment against you in favor of a mortgage lender that has not satisfied the full amount of the claim against you after a home foreclosure.

For example, let’s say your lender files a foreclosure lawsuit against you and seizes your home. Then the lender sells the home and does not get enough money from the sale to cover the amount of your mortgage. Then the lender gets a “deficiency judgment” against you, which makes up the difference between the amount the lender received from the sale and the remaining balance you owed on the mortgage.

Next, the lender determines what property you own and where it is located. If the property is not in Illinois, the lender asks an Illinois court to issue a “sister-state judgment”, which can be enforced against you in Illinois.

Here’s how this works:

Article IV of the U.S. Constitution requires that every state must give full faith and credit to judicial proceedings in every other state. As a result, a judgment issued against you by a non-Illinois court must be given full faith and credit by state courts in Illinois.

For example, let’s say a lender in Colorado gets a deficiency judgment against you from a foreclosure on property you once owned in Colorado. The lender must register the Colorado judgment as an Illinois sister-state judgment and apply to an Illinois court where your bank account is located.

Next, the lender must give you notice of this filing. This allows you to object to the court issuing a sister-state judgment based on legal problems with the application or problems with the original judgment, which may not be final and unconditional. If you do not respond, then the Illinois court usually issues the judgment.

The lender must then get a writ of execution directing a County Marshal in Illinois to enforce the judgment. Then the lender directs the County Marshal to perform a bank levy at the Illinois bank where you have money. The Illinois sister-state judgment is required since the Colorado court does not have the authority to direct the actions of the County Marshal in Illinois.

As soon as you receive notice of the lender’s application to get a sister-state judgment from an Illinois court, I urge you to contact an experienced financial rescue and bankruptcy lawyer in Illinois. Your lawyer may be able to take action against the lender, but you won’t know this until you have a financial rescue lawyer review the notice you receive. Using the services of an Illinois lawyer who is an expert in foreclosures is your best defense when fighting an Illinois sister-state deficiency judgment.