I’ve taken the liberty of outlining the foreclosure process in Georgia to help any potential clients make the right decision in seeking legal advice before its too late.
If you are facing a potential home foreclosure, you will receive a series of letters in the mail that often just confuse and bewilder a layperson with unnecessary legalese. All too often, people will simply ignore these letters and allow a foreclosure to take place without seeking help from a bankruptcy attorney who could have filed a Chapter 13 to stop the foreclosure sale and allow for the mortgage arrears to be caught up over a five year period of time.
Month 0: Missed payment
The first month you miss a payment, you will likely receive a call from your lender asking what the problem is and inquiring as to why you have not made your monthly mortgage payment. You may even receive written correspondence at this point in the form of a threatening letter demanding that you pay your monthly mortgage “or else”.
Month 3: Foreclosure attorney
Depending on the economic climate and the lending bank, your case will be sent to a foreclosure law firm in Georgia to handle the non-judicial foreclosure of your property. Georgia is a creditor friendly state that allows a lender to sell your home to satisfy the outstanding loan amount without seeking the court’s authority to do so. Hopefully your eyes have not glazed over yet. Every deed to secure debt signed in Georgia contains a “power of sale” clause that allows the lender to sell your property without court intervention. Once your lender sends your case file to a foreclosure law firm, all bets are off in most circumstances.
Month 3-4: The 10-Day Letter
The foreclosing attorney will likely send a demand letter requesting the payment of all past due amounts within 10 days of receipt of the letter. The entire purpose of this letter is to allow the lender to collect statutory attorneys’ fees in addition to the outstanding principal, interest, and late fees.
Month 3-4: Advertising and Service
The lender (through its foreclosing attorney) is required to advertise the foreclosure sale of your home for 4 consecutive weeks in the official newspaper of the county where your property is located. The lender is also required to send the borrower certified notice of its intention to sell the property at a foreclosure sale no later than 30 days prior to the sale. The certified notice and 10-day letter are often sent at the same time, which causes a lot of confusion. If you receive a 10-day letter and a notice of foreclosure on January 3, you will have until January 13 to pay all past due amount to avoid attorneys’ fees being tacked on to the balance owed. You will then have until the first Tuesday in February to stop the foreclosure sale.
Month 5: Foreclosure
If you decided not to seek help from a qualified Chapter 13 attorney, the lender will cry your foreclosure sale on the county courthouse steps on the first Tuesday of the month following the foreclosure advertisement. The foreclosure law firm will auction the property to the highest bidder. In most cases, the bank simply takes back the property by bidding whatever is owed on it.
Month 6: Eviction
In many states, there is a right of redemption after the foreclosure sale is completed. In these states, you can live in your home for a “redemption” period that will give the borrower a few months to pay off the entire balance of the mortgage. Unfortunately, there is NO statutory right of redemption under Georgia law. After the foreclosure sale is complete, the bank will file an eviction action. This will take between two weeks and one month.
Please remember that under Georgia law, once your home has been sold at a foreclosure sale, there is practically nothing practical you can do to reverse the sale. Your best option is to seek the assistance of a Chapter 13 bankruptcy attorney to help you file a Chapter 13 plan that will allow you to stop the foreclosure sale and catch up any missed payments over a 5-year period of time.