The foreclosure process in NJ can be very confusing and scary. In the more than 30 years that we have helped people save their homes, as foreclosure attorneys in NJ, we have been asked many questions about the NJ foreclosure process. This blog will address 10 of the most often asked questions.
#1. Do I Have to Move Out Once I Am Sued in Foreclosure?
No. There is a common misconception that as soon as the lender files a foreclosure lawsuit you must move out. That is not true. The New Jersey foreclosure process can take several months from the beginning until eviction. Only once you are evicted do you need to leave.
You do not have to leave until you have a notice from the Court or Sheriff requiring you to leave. After the Sheriff Sale, the new property owner must get a Writ of Possession to force the homeowner to leave the property. This Writ allows the Sheriff to evict you from the property. The new owner is not allowed to just lock you out. You should not, however, wait until the Sheriff comes to evict you to leave. At that point they will remove you and your possessions from the property.
#2. Can Filing Bankruptcy Stop the Sheriff’s Sale?
At any time during the NJ foreclosure process, up until the Sheriff’s sale, filing a bankruptcy with a foreclosure attorney in NJ will put a hold on the foreclosure lawsuit and any Sheriff Sale. It is also possible to save your home by filing a Chapter 13 bankruptcy which lets you cure the past due payments and/or seek a loan modification.
#3. Will I Still Owe the Bank Money after the Sheriff Sale?
A foreclosure Sheriff Sale is an auction. At the foreclosure sale your property (your house) is sold to the highest bidder. The bank who owns the loan often buys the property at the sale or sets a price at which it will allow the property to be sold. This price is often less than the amount that you owe on the loan. If the house sells for less than the amount of the foreclosure judgment, the lender can go after the homeowner for the rest of the money. In order to do so, however, the lender must file a new lawsuit in the Law Division to get a judgment. The lender has a very short time to bring this lawsuit. This is very rare in New Jersey.
#4. Can The Bank Go After My Other Assets in a Foreclosure?
The Court Order which allows the property to be sold is limited to the real estate. A foreclosure judgment does not give the lender the right to get money from the borrower or get assets other than the real estate.
If the lender wants to get other assets, it must file a new lawsuit and get a judgment for a specified amount of money. Only then can the lender go after your other assets. It is important to know that this rarely happens in the State of New Jersey, but it is something that a NJ foreclosure attorney can help you with.
#5. If I Have Equity in My House Will I Lose it in Foreclosure?
When the House Sells for Less Than You Owe
Any equity you might have had in the house if it had been sold before the Sheriff Sale will be lost if it sells for less than you owe. You will not get any money back. That is why a NJ foreclosure attorney will recommend that if you can sell it for more than you owe, it is usually a good idea to sell your house before the Sheriff Sale,
When the House Sells for More Than You Owe
The only time that the property owner gets any monies after the Sheriff Sale is when the property is sold at the sale for more than the amount due under the foreclosure judgment. This generally is not the case.
When that does happen, the Sheriff will deposit the “surplus funds” with the Court. To get this money the former homeowner, or any party claiming a lien on the property, with the aid of a foreclosure defense attorney, must file a motion with the Court requesting a turnover of the surplus fund. The Court will then decide who is entitled to the surplus funds.
#6. After the Sheriff Sale Can I Get My House Back?
After the Sheriff Sale the property owner has 10 days to get the property back. This is called redeeming the property. It is very hard to redeem the property because to do so you must pay the entire amount of the foreclosure judgment plus any other amounts owed. If you file bankruptcy with the help of a NJ foreclosure attorney, however, you can get an extra 60 days to get the monies together and redeem the property.
#7. When Can I Stop Keeping Insurance on My Property?
Many people think they can cancel their homeowner’s insurance if they have been sued in a NJ foreclosure. A NJ foreclosure defense attorney will tell you that is not correct. Until 10 days after a Sheriff Sale, or until the deed is no longer in your name, you should still have insurance that will cover you for liability claims. For instance, if someone gets hurt on the property such as by falling, or a fire, or an incident on your property causes damage to someone else’s property, you can still be sued and may be liable as long as you are still the property owner.
If you stop keeping insurance, the lender might get their own which is called forced place insurance. A forced place insurance policy usually costs much more than if you get your own and usually only covers the property and does not cover you for liability.
#8. Do I Have to Leave my Foreclosed Home Completely Empty?
No. You are not required to clean the property or remove furniture or your other belongings before moving out.
#9. What Happens to Things Left in a Foreclosed Home?
On the eviction date, if you have not moved out, the Sheriff will come with a truck and take all your things out of the house and put them in storage. The last thing you want is for this to happen, as any foreclosure defense attorney in NJ will tell you. Instead, you should leave and take all of your personal possessions that are not considered permanent fixtures of the property.
#10. What Can I Take from the House After Foreclosure?
As the former property owner, you own and can remove all of the personal property which is in the house. This means that you can take all free-standing appliances, your furniture, clothing and other personal household goods.
Do not take anything that is permanently attached to the property such as plumbing, toilets, built in appliances and mechanical fixtures. A way to think about it is that you must leave any item that would cause physical damage to the property if you removed it. Do not damage the property on purpose.
Call Now for a Free Strategy Session From a NJ Foreclosure Defense Lawyer at Levitt and Slafkes
If you are currently going through the foreclosure process in New Jersey the best thing that you can do is find a foreclosure defense lawyer who will help you understand the process and your rights in it. As we explored in this article, there are many misconceptions out there which may cause you undue stress. We at Levitt and Slafkes are here to help. Please don’t hesitate to reach out to us.
We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years. The information on this website and blogs is for general information purposes only. Nothing should be taken as legal advice for any individual case or situation.