Indiana Foreclosure Laws

Indiana allows only for judicial or in-court foreclosures, which means that all foreclosures in the state are administered in courts. Most foreclosures take approximately nine months.

Pre-Foreclosure

The lender initiates a foreclosure by filing a complaint against the debtor in court. Most lenders will inform a debtor that they are about to file a complaint, and offer plenty of warning and even send them a default notice. The actual period of pre-foreclosure depends on the mortgage. On most newer mortgages, it usually takes roughly three months between the moment a lender lodges a complaint against a debtor in court and the actual foreclosure auction. For some older mortgages, the pre-foreclosure period may take six months or a year. For abandoned property, no waiting or pre-foreclosure period is needed. In some cases, the debtor can agree to discharge the waiting period and effectively allow the auction to take place right away. However, if this happens the lender loses the right to go after outstanding debts that are not covered by the proceeds of the auction.

Once the pre-foreclosure waiting period is over, the clerk certifies and issues a judgment and an order demanding the sale of the property. The sheriff is given this order of sale and then can progress with the auction. Up until the auction itself, the debt can stop the foreclosure by paying the full amount of the debt along with interest and the costs the lender has incurred.

Notice of Auction

Before a public foreclosure auction can take place in Indiana, a notice of auction must be published. This begins when the sheriff chooses a professional auctioneer, who will be responsible for overseeing the auction. Then, the sheriff must publish the sale notice for three weeks, once weekly, in a local daily publication (generally a newspaper). The first published notice must appear in the newspaper a month before the auction. In addition, the sheriff is responsible for posting the notice of sale in a minimum of three different public locations. The notice must be posted in the local courthouse as well. Finally, the Sheriff must have the debtor served before the auction with the notice. If the sale is postponed for any reason, a new sale request must be filed by the sheriff and the new notice of sale needs to be posted and published again.

Once the foreclosure auction has taken place and the winning bidder has paid the bid amount, the winning bidder is given property ownership. After the sale, the debtor has no rights of redemption.