Homeowner Association (HOA) foreclosure and bankruptcy can become very complicated issues when it comes to bankruptcy law. Homeowner associations collect either monthly or yearly fees from a homeowner to help pay for common expenses held by property owners within an association. Homeowners are normally made aware of these ongoing expenses before they ever purchase any property. In most states if a homeowner defaults on payments of HOA fees, the HOA can get a judgment against the homeowner for the past due payments and attach a lien against the homeowner’s property. With a successful lien on a property, the lien holder has a right to a foreclosure on the property if they choose to do so. One protection a homeowner has against foreclosure is to file for bankruptcy protection. Continue reading
In the foreclosure process, most states have a redemption period that must be honored before a homeowner is evicted. When redemption runs out varies from state to state, and there are some states that do not have a redemption period policy.
A blogger on a bankruptcy forum website recently shared concerns about the redemption period in her state and how it would effect them now that the period was ending. She wrote, “I am six months pregnant, spent the last 4 months on and off bed rest. Our redemption period ends today, and I am freaking out that the lenders will be at the home soon to change the locks…What do you think our chances our of having through the weekend to move out? ”
What are the homeowner’s rights after the redemption time has run out?
The redemption period is the time the homeowner is given to redeem a house in foreclosure once the house has been sold on the auction block at the sheriff’s sale. The redemption period usually allotted ranges from 30 days to 6 months in most states. The homeowner must pay the principal, interest, and associated fees to redeem the house, or the homeowner must vacate the home at the end of the redemption time.
If the homeowner does not vacate the home at the end of the redemption period, most states require the homeowner be sent an eviction notice. Once an eviction notice has been served, if the homeowner has still not vacated the property by the end of the time allowed by law, a representative of the authority of the court, usually a sheriff or deputy sheriff, will come and physically remove the homeowner or homeowners and all their belongings from the premises.
What can happen during the redemption time?
The homeowner can continue to live in the home until the end of the redemption period. Technically, the homeowners still own the property until the opportunity to redeem has expired.
If there is any equity in the home, the homeowner has the right to sell the property up until the redemption time is finished, but the homeowner must pay all the interest, fees, and legal costs for making the sell.
The homeowner will still have normal financial responsibilities of running a household, like paying for utilities and insurance.
The redemption period can be shortened under certain circumstances if the homeowner vacates the property during this time.
Filing for bankruptcy protection can extend the redemption period until the bankruptcy is settled.
What can happen once the redemption time runs out?
Whoever holds the sheriff’s sale certificate becomes the rightful owner of the property. The homeowner’s name on the title becomes mute at this point because the former homeowners no longer own the property.
The homeowners should vacate the property. They cannot legally remain in the residence.
If the owner has not moved out by the end of the redemption period, they then can be evicted through the state laws governing such.
The homeowners give up any right to equity in the home if they have not redeemed the home at this point.
If you are facing foreclosure, it is a good idea to know your rights concerning how to legally handle your plight. Consult with an experienced lawyer about your options before you make any decisions on your home you may later regret.
- The Eviction Process Normally Follows the Foreclosure Process (betterbankruptcy.com)