Foreclosure Information for Kentucky

Kentucky Foreclosure Laws

Kentucky foreclosures are handled through the courts. This is called a Judicial Foreclosure.  The typical timeline for a Kentucky foreclosure is approximately six months.  However, in today's market the time is usually more like 8 - 9 months.

Pre-foreclosure Period

Kentucky foreclosures occur under court order. The only exception is with abandoned properties, where a lender may take possession once a borrower defaults.  However, they cannot take title to the property until the foreclosure sale is completed.  It is still possible to complete a Short Sale even if you have moved out, or plan to move out.

A complaint and notice of pending action (Lis Pendens) are filed in the public records to start the foreclosure process. This usually happens when you are about 90 days late.  The sheriff typically delivers a notice of the pending action to the borrower, who has 20 days to respond. If the borrower fails to respond, the lender asks the court to make a ruling. If the court rules against the borrower, a foreclosure sale date is set.  This process period is normally 147 days. The property must be appraised prior to the sale. 

Notice of Sale / Auction

The sale usually occurs at least one month after the court rules against the borrower. The notice of sale must contain the date, location, and terms of the sale, and it should be published for three weeks in a newspaper. Any postponement of the sale must occur through a court order. The sale, conducted by a court official called a master commissioner, usually occurs at the courthouse, and the highest bidder purchases the property. The purchaser may pay in cash or post bond to pay in installments. After the sale, a motion to confirm is heard, and the deed is prepared and presented to the clerk.

If the sale price is less than two-thirds of the appraised value, the borrower has the right to redeem the property from the buyer by paying the sale price plus interest. This redemption period lasts for one year from the foreclosure sale date. 

Bankruptcy

If you are considering bankruptcy, you should consult a bankruptcy attorney.  However, we can tell you this.  Bankruptcy does not prevent a foreclosure.  You put up the house for collateral on the loan, the lender has the right to take the house back to recover what they can.  The bankruptcy can delay a foreclosure, but it will not prevent it.  Lenders will usually not consider a Short Sale while you are in bankruptcy, as this is considered to be a collection activity, and they are barred from collection activities by the bankruptcy.

IMPORTANT NOTICE: