Foreclosure and Bankruptcy

Home foreclosure in Minnesota happens via one of two legal proceedings: either the lender forecloses by advertisement or the lender forecloses by action. Foreclosure by advertisement is the most common of the two Minnesota residential foreclosure processes. Minnesota law governs the foreclosure process while the terms of a mortgage govern a homeowner’s rights regarding arrears and a lender’s ability to foreclose.

For more detailed information about foreclosure law and procedure in Minnesota, tax consequences of foreclosure, what bankruptcy can do to stop foreclosure and more, be sure to read Wartchow Law’s Foreclosure Blog.

When facing a pending sheriff’s sale or foreclosure action, it’s imperative to understand the Minnesota Foreclosure Process, Timeline and How Bankruptcy Can Help to stall or postpone the sale in Chapter 7 bankruptcy or even help the homeowner obtain relief by paying off mortgage or HOA arrears over the course of a three to five year Chapter 13 plan. Bankruptcy is one way to resolve a looming foreclosure whether your goal is to buy more time in the home before you must move out or you want the opportunity that Chapter 13 bankruptcy provides to repay the arrears over a five-year repayment plan.

If you own a condominium or town home (whether as your residence or as a rental property), the homeowner’s association can also foreclosure for unpaid HOA assessments since the HOA has a statutory lien on the unit for unpaid association assessments. During and after a condominium foreclosure, it’s particularly important to understand how bankruptcy may impact a condo owner’s continuing liability for HOAs, association dues and other assessments, the right to continue to occupy or use the property and use the common amenities, and foreclosure.

Other than filing a bankruptcy proceeding, Minnesota law also provides homeowners a statutory right to postponement of sheriff’s sale, which delays the sheriff’s sale in exchange for en equally shortened redemption period after the foreclosure.

Bankruptcy attorney Lynn Wartchow will evaluate which form of bankruptcy matches your goals with regard to keeping your home and foreclosure. Contact Wartchow Law for a free evaluation of your bankruptcy options.