Skip to Content Top


Unfortunately, the foreclosure crisis in Chicago is far from over. Homeowners continue to struggle to make payments as the economy remains stagnant. To add insult to injury, many of these homeowners are underwater - meaning the amount still owed on their mortgage is more than what the home is even worth.

For these underwater homeowners, many believe they can simply walk away from their mortgage and surrender their home to their lender. But, before homeowners do this, they had better know if they live in a recourse or non-recourse state.

The Basics of a Deficiency Judgment

In a non-recourse state, if an underwater homeowner stops making mortgage payments and walks away - often known as a strategic default - the lender is not allowed to come after them for the difference between the loan balance and the sale price of the foreclosed property.

Conversely, in recourse states such as Illinois, lenders are permitted to pursue a homeowner if the sale of the house does not cover the entire amount still owed on the mortgage - known as a deficiency Judgment. In this proceeding, the homeowner is liable for the remaining balance. Simply walking away from a mortgage may expose the homeowner to a deficiency judgment.

For example, imagine a couple named Blake and Crystal who have a mortgage balance of $600,000, but whose home is now only worth $450,000. If Blake and Crystal were to simply walk away from the loan, and their lender is only able to sell their home for $450,000, then the lender would be able to pursue Blake and Crystal for the remaining $150,000.

It is probably wise for Blake and Crystal to discuss their options with an experienced foreclosure defense attorney before making any rash decisions in order to avoid deficiency judgment liability.

One such option available to Blake and Crystal is to file for bankruptcy. A bankruptcy proceeding absolves the debtor from qualifying debt and stops foreclosures instantly.

  • However, there are many other alternatives to consider in addition to bankruptcy, including:
  • Forbearance options
  • Mortgage modification plans
  • Deed-in-lieu of foreclosure

An experienced foreclosure defense attorney can discuss the many alternatives and help determine the best option for each home owner's unique situation.

Contact Us Today!

Talk to the leading law firm in the country about your rights for free! Fill out the form below or give us a call at (312) 313-1613 and we would be happy to give you the answers you need to make informed decisions for yourself and your family.

  • Please enter your first name.
  • Please enter your last name.
  • Please enter your phone number.
    This isn't a valid phone number.
  • Please enter your email address.
    This isn't a valid email address.
  • Please make a selection.
  • Please make a selection.
  • Please enter a message.
    • Please read and agree to disclaimer.