Updated on January 9, 2024
What Happens After Foreclosure in Georgia?
Foreclosure is the process of a bank or lender retaking possession of a property after its owner falls behind on their mortgage payments. In Georgia, there are two types of foreclosures: judicial and non-judicial. However, regardless of whether a lender goes through the courts, what happens after foreclosures remains the same.
How Long Does a Foreclosure Take in Georgia?
In Georgia, the average process takes between one to three months. Because Georgia laws permit non-judicial foreclosures, lenders can foreclose on homes by simply sending a notice of intent to foreclose and then selling the property at auction. This is known as exercising the “power of sale.”
When you fall behind on your payments, your creditor can send you a notice of intent to foreclose, stating that you must pay off your mortgage in full within 30 days or your house will be sold at a public sale. Creditors are also required to publicly advertise the sale once a week for four weeks.
In Georgia, foreclosure sales typically occur on the first Tuesday of the month, which means that the timing is crucial. If there is any sort of delay, the sale will be moved to the following month. However, foreclosures can technically occur within as few as 30 days.
Homeowners and Tenants
While many homeowners choose to simply move out after their houses are sold in foreclosure, if you don’t move out on your own, the new owner must make a demand for possession of the property and begin eviction proceedings. In Georgia, the eviction process usually takes between 14 to 30 days. After you have been evicted, you will have to move out and take all of your possessions with you.
However, for people who rent houses or apartments, the federal Protecting Tenants at Foreclosure Act (PTFA) allows you to stay for 90 days or the remainder of the lease term after the property is sold. This means that if the home you rent is foreclosed on, you cannot be evicted immediately after the sale just because the new owner wants you out.
Know Your Rights
It is essential that homeowners know their rights when dealing with these situations so that predatory lenders don’t take advantage of them. In general, lenders must provide borrowers with opportunities to mitigate their losses and adhere to Georiga foreclosure laws. Additionally, your contract with the lender may also provide you with more contractual rights on top of the legal protections created by the laws.
How Can You Avoid Foreclosure?
For many people, filing for bankruptcy is the best way to stop foreclosure in Georgia. When you file, the court will issue an “automatic stay” that temporarily prohibits the lender from foreclosing on your home, even after the process has begun. This stay is so powerful that it can even stop a sale scheduled for the next day.
If you are experiencing financial difficulties and cannot afford your mortgage payments, Chapter 13 bankruptcy can help address the underlying debt that is getting in the way of paying your home loan on time. While it won’t eliminate your mortgage, bankruptcy can wipe out about 90% of your other debts, freeing up funds to be used for your home loan.
The experienced Georgia bankruptcy lawyers at DebtStoppers have years of experience helping our clients avoid foreclosure and stay in their homes. Call or text us today at 678-673-2142 to request a free initial consultation.
Understanding the Foreclosure Process and Its Implications
The foreclosure process can be intimidating and confusing for homeowners. Knowing the steps involved and the potential consequences can help you make informed decisions about your options. The foreclosure process in Georgia typically begins when you fall behind on mortgage payments, and the lender sends a notice of intent to foreclose. If you cannot pay off the mortgage within the given time, the property will be sold at a public auction.
When Does the Foreclosure Moratorium End?
The foreclosure moratorium, which was implemented to provide temporary relief to homeowners during the COVID-19 pandemic, has ended or will end depending on the specific state and federal guidelines. It is crucial to stay informed about any changes in regulations and to seek professional advice if you are unsure about your current situation. Once the moratorium ends, lenders can proceed with foreclosures on delinquent mortgages, potentially putting many homeowners at risk of losing their homes.
What Happens in a Foreclosure?
In a foreclosure, the lender takes possession of the property and sells it at auction to recover the outstanding mortgage balance. If the property sells for less than the amount owed, the homeowner may still be responsible for the remaining debt, depending on state laws. After the foreclosure sale, the new owner can initiate eviction proceedings to remove the former homeowner from the property. However, tenants in the foreclosed property may have additional protections under the Protecting Tenants at Foreclosure Act (PTFA) and can stay for 90 days or the remainder of their lease term.
What are the consequences of foreclosure in Georgia?
Foreclosure in Georgia can have several legal, financial, and personal consequences for homeowners.
The most immediate consequence of foreclosure is the loss of your home. Once the foreclosure process is completed, you'll have to vacate the property, and ownership will transfer to the lender or the entity that purchased the property at a foreclosure auction. If you have not vacated the property, the new owner can initiate eviction proceedings to remove you from the premises.
It’s also important to note that in Georgia, depending on the type of mortgage and foreclosure process, lenders may be able to seek a deficiency judgment if the sale of the foreclosed property doesn't cover the outstanding mortgage balance and other fees.
Foreclosure also significantly impacts your credit score. A foreclosure remains on your record for several years and can make it challenging to rent a new home or secure a mortgage in the future. Landlords and lenders often consider a person's foreclosure history when making decisions about tenancy or loan approval. It can also make it challenging to qualify for new loans or credit cards.
Furthermore, the forgiven debt resulting from foreclosure might be considered taxable income by the IRS.
Last but not least, foreclosure can have significant emotional and personal impacts on individuals and families, including stress, uncertainty about the future, and the loss of a beloved family home.
If you're facing foreclosure, it is crucial to seek advice and assistance as soon as possible. Contacting an attorney can provide guidance on potential options that may be available to help mitigate the situation.
Bankruptcy as an Option to Stop Foreclosure
Filing for bankruptcy, particularly Chapter 13, can be a viable option for those seeking to avoid foreclosure. The automatic stay issued by the court temporarily halts the foreclosure process, providing homeowners with an opportunity to address their financial issues. Chapter 13 bankruptcy allows for the restructuring of debts and can help homeowners catch up on their mortgage payments while discharging a significant portion of other debts.
Seek Professional Assistance
When facing foreclosure, it is essential to seek professional advice from an experienced attorney who can help you navigate the complex process and explore available options. A knowledgeable lawyer can guide you through bankruptcy proceedings and help you make informed decisions to protect your home and financial future.