You may be concerned about foreclosure if you need to catch up on your mortgage payments. Foreclosure is the legal process by which a lender (fancy word for mortgage company) takes possession of a property when the borrower (that’s you) fails to make the required mortgage payments. As a certified specialist in consumer bankruptcy in North Carolina with decades of experience, I can help you understand the foreclosure timeline in North Carolina.
A Typical Foreclosure Timeline in North Carolina
In North Carolina, the foreclosure process typically takes around 120 days from the date the first payment is missed to when the property is sold at a foreclosure sale. The timeline may vary depending on several factors, including:
- The lender’s policies and procedures
- The type of foreclosure
- The borrower’s actions and responses during the process
Here’s a general timeline of the foreclosure process in North Carolina:
Day 1-15: Missed Payment
When you miss a payment, the lender usually sends a notice of default or demand letter. This letter will inform you that you’ve missed a payment and are in danger of foreclosure. It will also give you a deadline to bring your account current.
Day 30-45: Acceleration and Notice of Sale
If you fail to bring your account current within the deadline, the lender will accelerate the loan. This means that the entire balance of the loan is due immediately. The lender will then file a notice of sale with the county clerk. This notice will inform you of the time and place of the foreclosure sale.
Day 60-105: Notice of Hearing
The county clerk will mail a notice of hearing to you, the borrower, at least 20 days before the hearing. The hearing will take place in the county where the property is located, and it will determine whether the foreclosure sale should proceed.
We are often asked if you should attend that hearing or not. Here is a blog post where we discuss that in further detail.
Day 120: Foreclosure Sale
If the hearing determines that the foreclosure sale can proceed, the property will be sold at a foreclosure sale. The sale will usually occur at the courthouse or on the property itself. The winning bidder at the sale will become the property’s new owner. But wait…
The Upset Bid Period in North Carolina
In North Carolina, the upset bid period typically lasts for ten days after the foreclosure sale, allowing other parties to make a higher offer on the property. This period allows bidders to purchase the property at a higher price, which could result in the original bidder losing their deposit and any other money they invested in the property.
During the upset bid period, interested parties can submit a bid on the foreclosed property to the clerk of court in the county where the property is located. The new bid must be at least five percent higher than the original bid and must be accompanied by a deposit of five percent of the purchase price. The clerk of court will then post the new bid, and the upset bid period will begin again, allowing other parties to submit a higher bid. This process will continue until there are no new bids during the ten-day period. At that point, the highest bidder will be the property’s new owner. If the highest bidder defaults, then the upset bid period will begin anew.
However, during this time you can still file a Chapter 13 bankruptcy to save your home. If you don’t file the bankruptcy before the end of the upset bid period then you are unable to recover the home from the foreclosure process. It will be gone.
How Bankruptcy Can Help
If you’re facing foreclosure, filing for bankruptcy can help you stop the foreclosure process and get a fresh start. Bankruptcy can help in the following ways:
- Automatic stay: When you file for bankruptcy, an automatic stay goes into effect, which stops all collection actions, including foreclosure. This can give you time to catch up on missed payments or negotiate with the lender.
- Chapter 13 bankruptcy: This type of bankruptcy allows you to catch up on missed mortgage payments over three to five years. You’ll pay a trustee, who will then distribute the payments to your creditors, including your mortgage lender.
- Discharge of unsecured debts: Bankruptcy can also discharge unsecured debts, such as credit card debt, medical bills, and personal loans. This can free up money to help you catch up on missed mortgage payments.
If you’re facing foreclosure, it’s essential to act quickly. Contact a certified specialist in consumer bankruptcy to discuss your options and determine the best course of action for your situation.
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