Understanding the Steps of Foreclosure
Posted on October 1st, 2013
The process of foreclosure can seem like a hectic, rushed process where debtors are
uninformed and discriminated against. While the foreclosure process may seem like the quick
opportunity for lenders to turn properties and collect assets, it is a process that can take up to 9
months. Below are several of the stages of a foreclosure process in South Carolina.
1) Missed Payment Notices
The first stage is the receipt of missed payment notices. Most lenders provide a ten-day
grace period in processing monthly mortgage payments. However, receipt of payment
after the due date but within this grace period entitles the lender to add late fees which are
counterproductive to paying off your mortgage. In addition, late fees on mortgage payments
negatively affect the payment history component of your credit score and consequently lower
your overall credit score.
2) Notice of Default and Foreclosure
The next stage of foreclosure is the Notice of Default. Depending on the case, lenders can give
Notice of Default (NOD) statements as early as 30 days after a missed payment, however NODs
are generally sent after 3-6 months of delinquent payment. The NOD sets the final date to pay
off the entire balance of the mortgage and any additional late payments.
4) Summons and Complaint
South Carolina is a judicial foreclosure state. This means that a Notice and a Hearing in
court are required prior to the foreclosure sale. To initiate this process, the lender will
file a Summons and Complaint in the County in which the subject property is located. The
Summons and Complaint have to be served on the borrower. This means that the Summons
and Complaint must be either: 1) Given directly to the borrower; 2) Mailed to the borrower via
certified mail with a return receipt requested; 3) Left at the borrower’s usual place of residence
with someone more than 14 years of age; or 4) Served by publication in a local newspaper.
5) Period to Answer and the Importance of the Answer
The borrower has 30 days from the date of service of the Complaint to file her answer with
the Court. The importance of filing an Answer cannot be overstated. If the borrower fails to
file an Answer, the lender can move for a Default Judgment. The entry of a Default Judgment
allows the lender to foreclose based on nothing more than the borrower’s failure to answer
the Complaint. The entry of Default Judgment accelerates the foreclosure hearing process
(discussed later), which is the borrower’s only opportunity to be heard by the Court.
If the Answer is timely filed, the Discovery process is commenced. Discovery is the legal
mechanism in which each side requests and produces to the opposing side any and all evidence
which it will use to prove its case to the Court. This includes, but is not limited to, testimony
from witnesses, documents, records, etc. The Discovery process is important in proving key
elements of the borrower’s case. For instance, the borrower may believe that the lender has
failed to credit her account with payments made.
7) Foreclosure Hearing
After the Answer is filed, the Court will set a date for the Foreclosure Hearing. This hearing is
typically held within 60 days after the Answer is filed. The Foreclosure Hearing is conducted
by a “Master in Equity” or a “Special Referee” depending on the County where the property
is located. At this hearing, the borrower and lender are given an opportunity to be heard.
Evidence may be presented at this hearing. At the conclusion of this hearing, the presiding
judge may enter a Judgment of Foreclosure or request the parties draft a memorandum about
the law and facts of the case. If, at the hearing or after reading the parties’ memoranda, the
Judge decides the borrower is behind and a foreclosure is appropriate, he will enter a Judgment
of Foreclosure. The borrower has 30 days after the Judgment of Foreclosure to appeal the
8) Notice of Sale
After the Judgment of Foreclosure is entered, a sale date will be set. On this sale date, the
property will be sold by the judge at an auction conducted by the Court. The property will
be advertised in an appropriate newspaper once a week, for the three weeks immediately
preceding the sale.
9) Foreclosure Sale
The property is sold by the Court on the first Monday of the month following the
aforementioned 3 week period of advertisement. The property will be sold to the highest
bidder on the day of the sale, which is typically the bank who holds the mortgage. Immediately
following the sale, unless a deficiency is demanded by the Lender, the property must be
vacated by the borrower. If a deficiency judgment is demanded by the Lender, the sale remains
open for 30 days following the sale, after which the borrower must vacate the property.
A very important aspect of the foreclosure process is whether a Deficiency Judgment is
demanded. A Deficiency Judgment is a judgment entered personally against the borrower
which makes her liable to the lender for the amount owed to the lender if the home is sold
by the Court for less than the amount owed on the mortgage. If the Lender has demanded a
Deficiency Judgment, then the sale is held open for an additional 30 days. During this 30 day
period anyone can bid except for the winner of the initial sale. If there are no additional bids
during this 30 day period, the property will be sold to the highest bidder at the initial sale.
Foreclosure can be a stressful and confusing process for individuals to go through. At Skinner
Law Firm we know the best way to deal with the foreclosure process is to be proactive. Waiting
to be served with a foreclosure complaint before taking any action only adds to the stress. If
your financial situation has created an inability to pay your mortgage or other debts, you should
seek help from an attorney immediately to maximize your chances of keeping your house and
Stay Prepared for Financial Issues
Posted on August 28th, 2013
Randy Skinner was recently featured as a guest columnist in the Greenville News. To read his column, “Stay Prepared for Financial Issues” please click on the link below:
Stay prepared for financial issues
Posted on August 15th, 2013
For some, financial distress arises after unforeseen medical expenses. One Harvard University study found that unexpected medical expenses accounted for 62 percent of bankruptcy filings in any given year.
Shifts in the economy can also create financial strain. An unanticipated layoff could also have personal finance implications. For others, financial pressure is the product of uncontrolled spending with little regard for a budget.
Identity fraud is another common cause of financial distress. If your financial assets are not properly protected, the results could be quite harmful.
While the causes may be different, preparing oneself against financial trouble is similar across the board. It is important to plan ahead — try to have a “financial cushion” equal to three months of income to have some funds available if an unanticipated situation should occur.
Equally important is creating a realistic budget. By creating a weekly, monthly or even annual budget (and sticking to it) you can hold yourself accountable and ensure that you are spending, saving and investing properly.
In some cases, trouble is inevitable. When trouble can’t be avoided, the first step is to consider all of your options. Is there any spending you might be able to cut? Is it possible to access money that may be tied up elsewhere?
After considering, but before exercising your options, seeking professional help is the next best step. Trained professionals are a valuable resource and can help anchor you in a time of financial uncertainty.
After the storm of uncertainty has passed and stability has returned, it is important to move forward in a way that will maintain your financial footing. It is essential to maintain a healthy relationship with creditors once your finances are settled so that you can rely on them in the future. Preserving the working relationship between clients and their creditors ensures that everyone is satisfied and feels confident to proceed.
Financial worries are not often a topic of casual conversation, but I understand the stress and emotional toll that these troubles can create. I have focused my career on helping others move away from financial trouble and toward financial stability and security. When your financial future is at stake, be sure to seek professional help early on; it can keep a bad situation from growing much worse and, in times of uncertainty, will serve as a resource, not just a resolution.
Is It or Isn’t It Covered? Personal Exemptions When Filing for Bankruptcy
Posted on July 26th, 2013
When filing for personal bankruptcy, many believe that creditors will lay claim to all of your possessions in order to repay debts. However, within the U.S. and South Carolina law books, there are a set of laws commonly referred to as “asset protection.” These laws are put in place to make sure that people who have filed for bankruptcy can maintain certain assets.
There are two key provisions of asset protection; what property can and cannot be protected and who is able to apply for exemptions.
US bankruptcy exemption law includes protection for:
- A percent of wages
- Social Security benefits
- Civil Service benefits (such as working for the U.S. Department of Foreign Affairs)
- Veterans benefits
Within South Carolina there are additional exemptions:
- Homestead (real property including co-op) or burial plot exemption up to $53,375 with joint-owners allowed to double exemption to $106,750
- Cash or liquid asset exemption up to $5,625 in lieu of the homestead exemption
- Motor vehicles exemption up to $5,625
- Tools of trade (items necessary for employment) exemption up to $1,675
- Jewelry exemption up to $1,125
- Wild Card (any property from unused exemptions for homestead, burial, motor vehicle, personal property, or tool of trade exemptions) up to $5,625
An individual debtor must have an ownership interest in the property in order to claim any of the above excemptions.
Exemptions for alimony, child support, disability services, pensions, and life insurance are handled on a case by case basis. For any additional information on what exemptions you may qualify for, please contact Skinner Law Firm LLC.