Once you support on your home mortgage, one of the first fears that you might have is losing your home through foreclosure. It is necessary to understand how the foreclosure procedure works, what to expect if you get a Notice of Foreclosure, and why Chapter 13 bankruptcy can stop the foreclosure procedure and offer a method to keep your home.

First, recognize that the foreclosure process does spend some time. Despite the fact that it may seem as however once the process starts, there is no chance to reverse it (and often that holds true) there are methods to work with your lender, fight against a home foreclosure, and take steps to save your home.

In North Carolina there is a legal process that a lending institution has to follow.

A lending institution can't simply show up one day and take your home. There is a legal procedure that they should follow, and facing foreclosure is less unnerving when you understand exactly what you can expect. Understanding the procedure lets you understand what your time frame is so that you can deal with the bank to try to remain in your home. Knowing the process lets you determine whether your loan provider is doing everything properly, and in turn, how to react each step along the method.

The standard steps of the foreclosure process in North Carolina.

In North Carolina, foreclosures are regulated under Article 2A of Chapter 45 of the North Carolina General Statutes. Foreclosures always occur in state court in your county seat (for example, Raleigh in Wake County).

The initial step in a foreclosure takes place before the "legal" aspect even starts. The mortgage holder need to send you a pre-foreclosure notification that provides you details on your default, the interest charges and charges, and offers you an opportunity to treat your default.

Once you have notice, the mortgage holder might start a foreclosure action. A foreclosure action is a lawsuit with its own unique case number, which will begin with the year and "SP" for "special case." Once a foreclosure action has been opened, you will receive a Notice of Foreclosure Hearing, which is a formal court file that will offer the date and time of a foreclosure hearing that is required before your home can be sold. The foreclosure hearing might come as quickly as 20 days after you get the Notice of Foreclosure Hearing.

Judges typically do not hear foreclosures.

North Carolina is what is called a "power of sale" state. This indicates that normally no judge will hear a foreclosure, instead foreclosures are heard by the clerk of court.

The foreclosure hearing itself will be absolutely nothing like what you see on TV or in the movies. It is generally an evaluation by the clerk of files that the mortgage holder provides to him or her. The clerk can just look at a very narrow set of 4 issues before he or she can authorize a foreclosure sale. The clerk needs to find: (1) valid debt that is held by the party seeking to foreclose; (2) a default on that financial obligation; (3) the right for the holder to foreclose according to the deed of trust; and (4) that the debtor got correct notification of the hearing.

Because the clerk is just taking a look at such a narrow range of issues, it is exceptionally difficult to provide a defense at these hearings, and almost all hearings lead to an order authorizing foreclosure sale. The clerk can't take a look at why you are behind, or whether the bank is accountable for some misbehavior. They can just decide whether the bank has proved the four aspects. If you can show that the lender didn't satisfy among the elements (for example, show that the bank can not prove that it holds the note to your loan), then you may have a defense to the foreclosure, but successful defenses before the clerk are uncommon. Any defenses that fall outside the 4 aspects should be brought in a different action submitted in Superior Court; those cases can be pricey and are likewise difficult to win.

Either the debtor or the mortgage holder might also make a motion to continue the foreclosure hearing to a later date. Requesting to continue the foreclosure hearing could give you more time (up to 60 days) if you have the ability to reveal the clerk that there is a reasonable possibility that you will resolve the default with the bank and prevent the foreclosure from occurring. You might do this by showing that you have actually been negotiating payments with the bank, or that you are requesting a loan adjustment. If a continuation is granted, the clerk will release a written order that validates the continuance and the new date for the hearing.

The foreclosure sale

If the clerk allows the foreclosure to proceed, the next action is the sale of your residential or commercial property. You will get a Notification of Foreclosure Sale (comparable to the Notice of Foreclosure Hearing) that includes the date, time and location of the sale, which must be set at least 20 days after the hearing. The Notice of Foreclosure Sale will be released in the newspaper for 2 weeks also. The auction of your home will occur on the day displayed in the Notice of Foreclosure Sale, unless the sale is delayed.

Filing Chapter 13 personal bankruptcy at any time as much as 10 days after the sale can stop this process.

Even after the date of the sale, however, there is a 10-day "upset quote duration" that permits additional bids to buy the home. The sale is not final, and title to the home will not move from you to the effective bidder until after the 10-day upset quote duration ends. You can stop the sale of your home by filing a Chapter 13 personal bankruptcy at any time before the 10-day upset bid duration following the sale expires. The protections of the Bankruptcy Code stop all action to gather any of your financial obligations. That consists of the transfer of the deed to your home in a foreclosure case at the end of the 10-day upset bid duration. This indicates that if you submit a Chapter 13 personal bankruptcy before expiration of the upset quote duration, the sale of your home will not end up being last and you might be able to bring your mortgage present in time so that you can remain in your home.

The length of time can you stay in your home after the sale?

After the 10-day upset bid duration ends and the home is transferred, the new owner deserves to evict you from the residential or commercial property after providing you appropriate notification and time. The Sheriff will typically publish a notice on the residential or commercial property and evict within 20-30 days after the deed to the home transfers.

But keep in mind that there are several actions before you in fact lose your home, and it is very important at each action to evaluate whether it is possible to negotiate with the lending institution and whether insolvency security can use a way to capture up on your mortgage and save your home.

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Jim White

Jim White helps people and companies dealing with severe monetary injury by bringing and defending lawsuits and representing debtors in bankruptcy. He has actually successfully handled banks, big banks and other corporations in "David v. Goliath" cases. You can reach him at 919-246-4676.