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Foreclosure is something that is never really far from any homeowner's mind. The world can be very uncertain, and bad things happen to good people all the time. If you are facing foreclosure in Indiana, you undoubtedly want to know more about the process and any possible defenses available to you under Indiana real estate and foreclosure law. Some states offer what is known as a redemption period in foreclosure cases, but Indiana does not. Read on to find out more about Indiana foreclosure.
Indiana Foreclosure Laws
Indiana is a judicial foreclosure state, which favors the homeowner. Some states will allow a lender to declare the home foreclosed after the loan is defaulted on, and there is no hearing in front of a judge to argue the issue of foreclosure. A judicial foreclosure means that the homeowner can, if adequately handled, at least buy themselves some time to stop the process. Time is of the essence when you are fighting a foreclosure because you will need that time to work out a deal with your current lender to stop the foreclosure, or you will need time to ask a new lender to provide the funds you will need to get your home loan up to date, stopping the foreclosure.
How Long Does Foreclosure Take in Indiana?
It depends on whether or not you decide you want to fight the foreclosure. If the foreclosure is contested for some legal basis, like improper notice, it can slow down the foreclosure. If you have a strong case, you might be able to stop the foreclosure entirely, but you will still be liable for the debt. After all, you signed an agreement with the lender and are obligated to pay. Several approaches exist for the borrower to rearrange their loan or possibly have another lender take it over.
Once a final judgment of foreclosure is signed, the property is sold. In Indiana, the borrower has until the sale to recover ownership of their property. Since the property cannot be taken back after the sale, it is not considered a redemption. Once the property is sold at the sheriff's sale, you cannot get it back.
If the foreclosure is not contested, it can take anywhere from five to about seven months to complete the foreclosure process. If you are facing foreclosure in Indiana, your best first step is to consult with an experienced Indiana foreclosure defense attorney who should at least be able to buy you some time while you consider your options and whether or not you want to spend time and money fighting the foreclosure.
The Basic Foreclosure Process in Indiana:
-The borrower enters an agreement with the bank to borrow the money for the home purchase. The agreement is made up of two documents, the note, and the mortgage. The house and the land it is on is the collateral for the loan.
-The borrower defaults on the loan. At this point, it may be an accident, or the borrower is going through financial hardship; either way, the bank typically sends a notice. The terms and conditions of your agreement with the bank are vital at this point. Some lenders agree to give a grace period or agree to abide by specific procedures when it comes to giving notice of default on the loan. Review the terms relating to default and notice very carefully before you enter into the home loan agreement.
-The lender files for foreclosure. It can take five to seven months for the court to issue a judgment of foreclosure. Ideally, you will already be in touch with a lawyer or at least trying to renegotiate a deal with your lender. The lender may continue trying to work something out with you. You may have a strong case against your lender, and your attorney will be able to advise you in light of your personal facts and circumstances.
-The home is sold at a sheriff's sale. If the previous owner is still in the house, they will be evicted, but this is a rare occurrence. For a more in depth look at foreclosure read our article, What to Expect During Foreclosure.
Indiana Does Not Have a Post Sale Redemption Period
Several states offer a redemption period where a homeowner can redeem their home by either getting the mortgage up to date on their own or by taking out another loan to cover the debt and get back on track. To be clear, redeeming the property means paying to bring any loan payments and late fees owed up to date, and then you will have to continue to make your regular loan payments. Wisconsin will offer a three to six-month redemption period that begins after the foreclosure judgment is handed down by the court, depending on the size of the real estate being foreclosed upon. In Indiana, there is no redemption period after the foreclosure.
Is There A Way For Me To Save My Home?
Indiana does offer some chance of what could be considered redemption, though. If the homeowner can rectify their financial situation with the lender prior to the sheriff's sale, they can retrieve their home. Foreclosure defense is a question of resources and obtaining a solution before selling the house. During the Covid lockdowns, the federal government offered help to struggling homeowners, but that aid has ended as of the writing of this article.
Sometimes homeowners elect to file for bankruptcy in an effort to save their homes. Filing a petition for bankruptcy will mean that the bankruptcy court issues a stay prohibiting any collection activity, which includes foreclosure actions. If you cannot make your mortgage payments due to financial hardship, this may be a viable option for you to consider. Filing Chapter 7 or chapter 13 will result in an automatic stay if you have not previously filed for bankruptcy in the past that was dismissed. Chapter 7 will not allow you to keep your house, but it will buy you additional time to deal with the problem. Chapter 13, a repayment plan that takes five years, could allow you to keep the house by giving you time to catch up on any arrears on the loan, but you have to earn enough money to make the chapter 13 payments. A consult with a bankruptcy attorney would be a good idea and allow you to explore this option for keeping your home.
If you are facing Indiana foreclosure, you do have options. The first step is to consult with an experienced Indiana foreclosure defense attorney who can evaluate your situation and help you devise a strategy to keep your home or minimize your loss. If you are facing foreclosure in Indiana, feel free to call O'Flaherty Law; we would be happy to help you.
What to Expect From a Consultation
The purpose of a consultation is to determine whether our firm is a good fit for your legal needs. Although we often discuss expected results and costs, our attorneys do not give legal advice unless and until you choose to retain us. Consultations may carry a charge, depending on the facts of the matter and the area of law. The cost of your consultation, if any, is communicated to you by our intake team or the attorney.