The foreclosure process begins with the filing of Notices of Election and Demand with the public trustee of the county in which the real estate is located. Notices are mailed to the property owner, as well as others who have recorded interests in the property; the notices advise of the commencement of the process, the relative rights of interested parties, and the date of sale. The owner is allowed from 110 to 125 days (215 to 230 days for agricultural land) before sale, to cure the default. The owner has no rights of redemption after sale.
The filing of a petition in bankruptcy prevents the commencement or continuation of a foreclosure until an order for relief from the automatic stay of the bankruptcy court is obtained. A chapter 7 bankruptcy (liquidation) will stop the foreclosure process only until the lender can obtain an order allowing it to continue. The balance of the mortgage debt will be discharged.
In a chapter 13 bankruptcy, amounts in arrears on the mortgage can be made up through a payment plan over 3 to 5 years; or, the home may be surrendered to the lender and the balance of the debt will be discharged. The lender will be compelled to cease further collection processes until the plan is completed or it fails.
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