Many people are afraid to file for bankruptcy because they are worried about the possible consequences. However, sometimes not filing bankruptcy is a worse scenario that can result in the loss of your home and the requirement to pay off a deficiency judgment, along with other potential consequences.
Foreclosure Process in Nebraska
The Nebraska Trust Deeds Act lays out the foreclosure process in Nebraska, which can be a judicial or non-judicial remedy in the state. Foreclosure moves through the following process, usually completed in only a few months:
- The trustee records a notice of default in the county recorder’s office. The borrower usually only has one month to cure the default.
- The trustee sends the notice of default to the borrower via certified mail.
- The borrower can cure the default by becoming fully current under the terms of the loan, such as by catching up on any missed mortgage payments and late fees. If the borrower does not become current on the loan, the lender can accelerate the loan and make the entire loan due.
- The trustee publishes a notice of sale in a newspaper of general circulation once a week for five weeks in a row.
- The foreclosure sale occurs on the date that was publicized. During the sale, the lender can bid up to the total amount that is owed or less than this amount. Other parties can also bid on the property. The property goes to the highest bidder.
- There is no redemption period in Nebraska after a foreclosure occurs, so the borrower cannot try to redeem the loan after it has been sold to another buyer, including the lender.
- If the property sells for less than the existing mortgage, the lender can seek a deficiency judgment for the difference in the loan amount and the sales price. If the lender takes this route, the deficiency judgment must be initiated within three months of the sale.
Power of Sale Notice Requirements
The lender must carefully follow various requirements when executing the power of sale notice. The lender must record the notice of sale with the register of deeds before beginning the foreclosure process. Additionally, the lender must:
- Send the borrower, junior lienholders, and others who have requested such notice 10 or more days after recording the notice of default
- Send the borrower and all other interested parties a notice of foreclosure sale 20 days before the sale.
- Advertise the notice of sale for five consecutive weeks with the last publication occurring between 10 and 30 days before the sale date. In all situations, the notice of default must be published at least three times, once a week for three consecutive weeks. Publication must start no later than 10 days after the notice of default is filed.
The publicized sale must occur at the time, place, and manner indicated in the notice of sale.
This process can only occur if the trust deed includes the power of sale language. Otherwise, the lender would have to follow the judicial foreclosure process, which ultimately sells the property in a public sale after filling a legal complaint in court.
What to Do If You Receive the Notice
If you receive a notice of default or notice of sale, it is important that you act quickly. If you do not, you could lose your house and even be required to pay a deficiency judgment. You may have options that you’re not aware of. A foreclosure and bankruptcy lawyer can discuss your options during a confidential consultation.
How Chapter 13 Can Save Your House
Once you file Chapter 13 bankruptcy, an automatic stay is put in place that prevents any creditors or lenders from taking collection efforts against you. This filing can prevent the lender from foreclosing on your home if you make your regular monthly mortgage payments during your bankruptcy process. A Chapter 13 bankruptcy can allow you to catch up on payments that you are behind on during the pendency of your bankruptcy case, which can be up to five years.
In this way, Chapter 13 bankruptcy can prevent your home from being foreclosed and also allow you to catch up on your mortgage. Additionally, it can allow you to reduce other monthly obligations to make it more likely that you can catch up on your mortgage. Chapter 13 bankruptcy allows you to reorganize your debt into more manageable payments that you make to the bankruptcy trustee. You can also eliminate unsecured debt that is not paid off during the bankruptcy plan period.
If you are concerned about your home being foreclosed upon and would like financial relief, a knowledgeable Nebraska Chapter 13 lawyer can discuss your rights and options. Contact us today to schedule a confidential consultation and to begin the process of getting a hold on your debt.
