2 - 3 Months

Texas Foreclosure Timeline

20 Days Can Be 1 Day 21 Days Minimum

No Payments 1st 2nd Posting Official Official at

Letter Letter Courthouse

1. Reinstatement

2 Redemption

3. Deed In Lieu of Foreclosure

4. Legal Delay

5. File Bankruptcy

6. Renegotiate

7. Sell the Property

8. Do Nothing

California Foreclosure Timeline 2 - 3 Months 3 - 4 Weeks 3 Months 20 Days Next Day

No Payments 1st 2nd Posting Redeem Sale Official Official at Only

Letter Letter Courthouse

2 Redemption

Sale 1st Tuesday

Deed in Lieu of Foreclosure For owners who know they will have no opportunity to reinstate, redeem, or even sell their property and just want out of the property, a deed in lieu of foreclosure may be a viable foreclosure alternative. Sometimes the owner can turn the ownership of the property over to the bank and avoid the trauma of foreclosure. This action will reduce the negative impact on the owners credit. In most states, including Texas, an owner can execute a deed of foreclosure up till the foreclosure sale.

When a lender takes a deed in lieu of foreclosure from a borrower, the lender receives the property subject to all junior and senior liens. This can be potentially hazardous to the lender. The property could be overencumbered with tax liens, judgments, and other involuntary liens. It is most important for the lender to get an up-to-date title report the day the deed is to be accepted.

If the title report shows trouble that the lender doesnt want to deal with, the lender should proceed with the foreclosure sale rather than accept the deed. On the other hand, if the title report shows no other liens but the lenders, the lender may choose to accept the deed.

Caution Additional caution should be taken whenever accepting a deed in lieu of foreclosure. The debtors could later claim that the lender took unfair advantage of them, by offering them no or low compensation for the equity they did have in the property.

The courts have been known to rule in favor of the former property owner and allow the borrower to reclaim the property or cloud the lenders title with a lawsuit. Lenders, to protect themselves, will request a written acknowledgment from the borrower stating that the borrower has received fair consideration for the property. Lenders also have the transaction handled by a title company. That way they have a better chance of getting marketable title.

Legal Delay If the owner can prove that the amount in default is inaccurate, often the owner can delay the foreclosure proceeding and gain additional time to find a more acceptable solution. The maximum time extension is effectively the time it would take to start the foreclosure process over again. The owner may also cause a legal delay up to the foreclosure sale itself. This action is not only possible in California, but in every other state as well.

File Bankruptcy Although this is not a permanent cure, filing bankruptcy can temporarily halt the foreclosure process. Before considering

this option, the owner should seek the advice of an attorney. The owner may file bankruptcy up to the day of the foreclosure sale.

Bankruptcy is a serious event that could affect the timing and ultimate outcome of any foreclosure. Bankruptcy is a legal procedure established by federal law to assist debtors who cant meet their financial obligations.The founding fathers of this country were so opposed to the traditional British solution of throwing debtors into prison that they created an alternative solution.

Two Categories Bankruptcies fall into two categories; liquidation and reorganization. Liquidation bankruptcies fall under Chapter 7 of the United States Bankruptcy Code. The debtor who takes this path ends up turning over all his or her nonexempt assets to the bankruptcy court.

A court-appointed trustee then has the responsibility of liquidating (selling) the assets and distributing the proceeds to the existing creditors on a pro rata basis. Any debts that remain unsatisfied at that time are discharged and legally nullified. The trustee works for both the debtor and the creditors. It is the duty of the trustee to try and preserve the debtors assets as much as possible to satisfy creditors.

Bankruptcies intended to assist the debtor with financial rehabilitation through reorganization come under the categories of Chapter 13 and Chapter 11 of the United States Bankruptcy Code. A Chapter 13 is intended for individuals with a regular source of income. A plan is proposed by which the debtor will continue to make payments on his or her debts and make up back payments with interest. A modified, extended schedule is often used to do this.

A Chapter 11 bankruptcy is used by corporations, partnerships, and those individuals who do not qualify for a Chapter 13 plan. The court procedures can be complex and lengthy.

Foreclosure Stops The moment a property owner in default files a petition for bankruptcy, foreclosure proceedings stop immediately. This results from a legal moratorium called an automatic stay imposed by the bankruptcy court. It prevents creditors from pursuing any legal actions to enforce their claims against a debtor.

If a foreclosure sale is held after a bankruptcy petition has been filed, the foreclosure will be ruled null and void by the bankruptcy judge. A lender must first seek relief from the automatic stay in order to proceed. The Bankruptcy Act states that the court must hear a lenders petition for relief from stay within 30 days. If the court fails to do so, the stay is automatically lifted.