IL is a recourse state, meaning the lender CAN come after you for any deficiency on a first mortgage after foreclosure. And additional liens will also come after you, and you will probably receive a 1099 income statement from the bank claiming the write-off on the mortgage is a taxable income event to you. Just because they told you they'd play nice with you doesn't mean it's true - if they think they can collect from you, they will come after you.
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People that work at banks whose responsibilities include speaking with customers generally do not have a high level of education or authority. The person you spoke to was wrong about the bank, but it may be an indication that no one with education or authority is actually reviewing the files.
For you, that may be a good thing, as it indicates that the bank personnel may overlook their rights to sue you on the mistaken belief that the co-owner's bankruptcy encompasses your obligation.
Hope this perspective helps!
It sounds like no, the bank representative was not giving you the correct information. The only way he or she is correct is if you are not listed on the note and only your partner is. Take a look at your loan documents. They consist of a "mortgage" and a "note." Only the people who sign the note are liable for the debt. If you signed the note you could be liable for a deficiency after bankruptcy. The trick is to avoid a deficiency in the foreclosure via a consent foreclosure or deed in lieu. In Cook County the bank is less likely to seek a personal deficiency because they have to take extra legal steps to do so and many banks decide not to go through the trouble. That doesn't meet that you are entirely protected in the future if they decide not to seek a personal deficiency as part of the foreclosure, but it doesn’t hurt your chances. In any event, you could also look into filing bankruptcy yourself.
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