• Closet? R. Kelly’s Whole Estate Trapped in Negative Equity

    When recording artist R. Kelly was hit with a $2.9 million foreclosure lawsuit on his mansion 30 miles outside of Chicago in July, WMAQ-TV reported it was a strategic foreclosure. The value of the estate had plunged from an estimated $5.2 million to $3.8 million in the span of one year, and Kelly had stopped making payments in an effort to get the loan modified. Now that the custom home is worth less than he owes, Forbes reported on December 14, 2011, that the Grammy-winner is listing the property as a $1.595 million short sale.

    The 22,000-square-foot mansion was built in 1997 and sits on a private, wooded lot surrounded by 12-foot high concrete and wrought iron wall, according to Forbes. The original loan Kelly was issued for the home in 1999 was for $3.5 million. In August, Kelly sold his former 8,000-square-foot Lakeview property for $2.74 million.

    As Forbes noted, the R&B singer is no stranger to legal trouble. In June 2008, he was acquitted of child pornography charges in a high-profile trial, and three years later Kelly’s former manager sued the singer for breach of oral contract and fraud. A month after that, he was hit with a tax lien for $837,000.

    While Kelly might not represent the average homeowner in need of foreclosure help , his story still demonstrates the effect the housing market is having on everyone-even the rich and famous. If you too have been unsuccessful in getting your own mortgage modified but know that neither a short sale or a strategic foreclosure really suits your needs, a Chapter 7 or Chapter 13 bankruptcy could allow you to stay in your house while helping you manage your bills.

    Is your house now worth less than you owe? How are you addressing your own negative equity situation?

    Benjamin Brand Services – Chicago bankruptcy lawyer

  • Proving Nothing is Sacred, Even Nuns Finding Themselves in Bankruptcy Court

    Chicago-area nuns have found themselves in bankruptcy court three times in the past two months, according to a story published by Senior Housing News (SHN) on December 7, 2011. The most recent case involved the Sisters of St. Joseph of the Third Order of St. Francis, who filed for Chapter 11 bankruptcy protection to restructure the debt of Clare Oaks, the continuing care retirement community (CCRC) in suburban Bartlett.

    “Senior living facilities have experienced substantial declines in occupancy as a result of market changes,” said Paul Rundell, managing director at the consulting firm Alvarez & Marsal, in court papers according to SHN. “Because of these challenging market conditions, [Clare Oaks] has experienced lower than anticipated revenue and a slower than anticipated fill up of the Clare Oaks Campus, which has caused the Debtor to default under its bond obligations.”

    SHN also noted that the Franciscan Sisters of Chicago Service Corporation (FSCSC) filed for bankruptcy protection on a luxury senior living facility located in Chicago in November after defaulting on bond debt. An Ohio CCRC belonging to an operating division of the FSCSC also filed for bankruptcy protection that same month after suffering “substantial declines in sales and occupancy” due to the struggling economy.

    If you are currently struggling to find some form of foreclosure help , you should know that you are not alone. You should also know that filing for Chapter 7 or Chapter 13 bankruptcy could help you keep your home if you are facing foreclosure. After all, if even sisterhoods of nuns are having to turn to bankruptcy, it would seem evident that filing is a better option than holding out for divine intervention.

    Benjamin Brand Services – Chicago bankruptcy lawyer