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Zombie titles and foreclosure: Are you a victim?

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Zombie titles and foreclosure: Are you a victim?

Written by Charles Newland on . Posted in Real Estate

Bank Owned Foreclosure.When homeowners embark on the bankruptcy process with the help of their Illinois bankruptcy lawyer, they often quickly pack up and move out of their home after receiving a foreclosure notice. When this occurs, many homeowners believe that their lender will take over the property. However, in some situations, the bank does not complete the process and the property’s title remains in the absent homeowner’s name, allowing it to become a zombie title.

Homeowners may face severe consequences

Since the property’s title still remains in the homeowner’s name, he or she is responsible for certain debts and expenses. These may include costs related to maintenance, property taxes and HOA dues. If the homeowner is unaware that he or she still owns the property, these expenses can remain unpaid for years and may eventually result in severe consequences.

For instance, if a bank fails to complete the foreclosure process during bankruptcy, the homeowner may:

  • Find that a tax collector comes after him or her to acquire back property taxes
  • Have a lawsuit filed against him or her by the homeowner’s association to recover assessments that have gone unpaid
  • Be threatened with fines for failing to comply with housing codes and other ordinances
  • Receive bills from the local government for trash removal, yard maintenance, repairs, graffiti scrubbing and other expenses
  • Be faced with jail time for not meeting repair deadlines

Those who file for bankruptcy with the assistance of their Illinois bankruptcy lawyer may also find that their credit score, which was already damaged during the foreclosure process, worsens when their home becomes a zombie foreclosure.

Thousands of these foreclosures haunt the U.S.

Zombie foreclosures are a prevalent problem in Illinois and throughout the U.S. According to The Huffington Post, a national survey found that there were over 300,000 zombie foreclosures in the country. However, these abandoned properties are a particular concern in Illinois. Although the number of these vacant homes was highest in Florida, this survey found that Illinois had the second highest number of zombie foreclosures in the country with 31,668 on the list.

Those who are in the midst of filing for bankruptcy should try to stay in their home as long as possible and wait until they receive an official notice from their lender to vacate the property to move out. Homeowners who do this are much less likely to become the victim of a zombie foreclosure. Additionally, those who desire to avoid the severe consequences associated with zombie foreclosures while filing for bankruptcy should consider turning to an Illinois bankruptcy lawyer for assistance.

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