U.S. Bank Trust v. Atchley (IL)

Summary: In order for a plaintiff to receive an in personam judgement under Illinois Foreclosure Law, a plaintiff must: (1) ask for an in personam judgment in the initial complaint; (2) list the defendant as the person personally liable for any deficiency; (3) provide documentation of the debt; and (4) have the defendant be personally served in the case.

U.S. Bank Trust, N.A. v. Atchley, 2015 IL App (3d) 150144.

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Facts: On January 2, 2014, U.S. Bank Trust, N.A. (“U.S. Bank”) filed to foreclose on Breanna D. Atchley. The complaint alleged that Atchley owed U.S. Bank $48,325.73, with interest accruing. On April 21, 2014, the trial court granted U.S. Bank’s motion for default judgment after Atchley failed to answer the complaint. The trial court wrote in the order that if the proceeds of the sale did not cover Atchley's debts, she would have a personal deficiency judgment against her.

After the judicial sale, the trial court ordered an in rem deficiency judgment for $24,817.57 against Atchley, rather than an in personam judgment. The trial court particularly took issue with the fact that U.S. Bank did not prove that Atchley did not file for bankruptcy and have this debt discharged. U.S. Bank appealed.

 Holding: Vacted in part and remanded. The appellate court concluded that pursuant to 735 ILCS 5/15-1101 of the Illinois Foreclosure Law, U.S. Bank had met its burden to gain an in personam judgment. Based on the language of the statute, if the plaintiff can meet the statute’s burden, then the court must issue an in personam judgment. U.S. Bank sought this particular judgement in the initial complaint, listed Atchley as a person personally liable, and attached note and mortgage (both signed by Atchley) to the complaint. Atchley was also personally served in the case.

The trial court’s concern about Atchley filing for bankruptcy was legitimate but misplaced. Atchley needed to first appear (which she never did) and establish that this debt was discharged in bankruptcy. It was not for U.S. Bank to prove that Atchley had not discharged the debt.

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By: ATG Underwriting Department | Posted on: Wed, 10/05/2016 - 4:31pm