One question I often get is: how long does the foreclosure process take in Indiana? I posted about this back in November, 2006. With the benefit of seven more years of experience and dozens of more cases, I’ve refined my answer. As outlined below, commercial foreclosures can take anywhere from five months at the absolute earliest to several years.
Judicial state. The first thing to understand is that Indiana is a judicial foreclosure state. A foreclosure requires a lawsuit, a judgment and a sheriff’s sale. The process officially starts with the filing of a complaint. (In residential cases only, Indiana law has pre-suit notice and settlement conference mandates.)
Timing. Predicting the timing largely depends upon whether and to what extent the borrower contests (defends) the proceeding.
Uncontested: 5 months minimum. If a business borrower does not contest a foreclosure, the process can move relatively quickly. Below are the major steps and an estimated timeline. Five months is about as fast as things will go. Realistically, the process will take longer.
Day 1: Filing of the Complaint.
Day 28/31: Motion for default judgment - can be sought 21 to 24 days after service of process. A summary judgment may be preferable to a default judgment, but that should not alter the timing in an uncontested case.
Day 60: Entry of judgment and decree of foreclosure - should occur in under 30 days.
Day 90: Praecipe for sheriff’s sale, including notice of same - by statute, cannot be filed until three months after the Complaint.
Day 150: Sheriff’s sale - happens about 60 days from Praecipe, depending on the county.
Contested: 8+ months minimum. The steps in a contested case essentially will be the same as those above, except that the court will hold a hearing on the summary judgment motion that will necessarily delay a ruling. Having said that, with the vagaries of litigation, it’s virtually impossible to conclusively estimate how long a case may last. Each one is different and driven by a wide variety of factors. Much depends upon how clear the default and the damages are, and how aggressively each party pushes its position. An eight-month contested foreclosure is optimistic. A year is not unusual.
Be prepared for delays. The timing will be impacted by the docket of a particular court and/or the schedule of an individual civil sheriffs’ office. Moreover, defense attorneys can prolong the matter by seeking (and obtaining) multiple extensions of time, serving requests for discovery and vigorously challenging a motion for summary judgment. In the event of a trial, meaning that the court denied summary judgment, a resolution of the case will be deferred many months if not years. Also remember that defendants can appeal an unfavorable ruling. Finally, a borrower/mortgagor can stop a sheriff’s sale by filing for bankruptcy protection at any time before the sale begins.
Even with the best loan documents and great facts, the Indiana foreclosure process, perhaps to the delight of borrowers and certainly the chagrin of lenders, has the potential to be a lengthy and expensive undertaking.