Kentucky Foreclosure Laws

Kentucky foreclosure laws permit only judicial foreclosures, which means that all foreclosures in the state are administered through the court system. Most foreclosures in Kentucky take about six months to complete.

Pre-Foreclosure

If a Kentucky property has been abandoned and is in foreclosure, the lender can take possession of the property after the debtor has defaulted. For most properties, however, a court order is needed to foreclose. The foreclosure process begins when the lender files the Lis Pendens, which is a notice of a pending lawsuit and a complaint. The debtor is generally served with the notice of the pending lawsuit and is given twenty days to reply to the complaint. If the debtor does not reply to the notice, the lender requests that the court proceed in making a ruling. If the court decides in favor of the lender, a date for the foreclosure auction is scheduled. Before the foreclosure sale can occur, however, Kentucky laws demand that the property be appraised.

Notice of Auction

In most cases, the foreclosure auction is scheduled for one month or more after the judgment. Before the auction can take place, a notice of sale or a notice of auction must be drawn up and published. The notice must include the details about the time and location of the auction. Kentucky foreclosure laws demand that the notice be published in a local newspaper for three weeks before the sale. If the sale must be postponed, a court order must be obtained first.

A master commissioner, which is a type of court official, oversees the foreclosure auction. In Kentucky, most foreclosure sales take place in the courthouse and are open to the public. The highest bidder is the winning bidder and must post bond to pay the bid price gradually or must pay cash upfront. After the auction takes place, the deed is presented to the clerk after a hearing of the motion to confirm.

The redemption period depends on the winning bid price. If the winning price of the property is under two-thirds of the property's appraised value, the redemption period is one year from the date of the sale. The property can be redeemed if the debtor pays the winning bid amount plus the interest.