How Foreclosure Works in Georgia

Foreclosure can happen fast in Georgia. Most Georgia homeowners don’t realize how fast foreclosure happens and how little real time it gives them to formulate and execute a plan to save their home.  Most mortgage payments are due on the first of the month and considered late after the 15th of the month.

1. Your Payment is Late: Your grace period is up and your payment is officially late.
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2. Day 31: Your mortgage is now in default. Your mortgage company sends you a letter and notifies the three credit bureaus. Your credit is damaged.
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3. Day 45–60: The lender informs you in a “demand” letter that you are in violation of the terms of your mortgage and that they place your file in foreclosure
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4. Day 61–90: Your lender “accelerates” your mortgage. This means that they will foreclose unless you pay the mortgage and the past due balance in full. At this point they will no longer accept partial payments.
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5. Day 91–105: In Georgia, your lender does not have to go through the court in order to foreclose on your home. Your lender will publish the notice to foreclose on your home in your county legal organ for 4 weeks.
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6. Day 106–180 — Georgia foreclosure sales are all conducted on the first Tuesday of each month, typically starting at 10am. Your home will be sold at an auction on the steps of the local courthouse. There is no right of redemption in Georgia so once your home is sold it is gone.

Chapter 13 bankruptcy can permanently stop a foreclosure. To qualify to stop a foreclosure in a Chapter 13, you must have enough income to pay mortgage payments after your filing date, in addition to a bankruptcy payment that will include mortgage arrears, homeowner association fees, car payments, and a portion of debt owed to unsecured creditors, such as credit card or medical bills. For example, if you are 4 months behind on your mortgage, you must have the income to pay for the regular mortgage payment going forward, plus the 4 months you are behind, spread out over a 36 or 60 month period.
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Chapter 7 bankruptcy will stop a foreclosure, but only temporarily. If your mortgage payments are behind and you file a Chapter 7, it is highly likely that you will ultimately lose the house unless you can pay back all the arrears before the Chapter 7 ends. Since Chapter 7 bankruptcy usually only lasts between 4 to 6 months, there is a very short amount of time to pay back arrears. However, if your goal is to simply slow down the foreclosure process, rather than completely eliminate it, Chapter 7 will accomplish that goal.
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Loan modifications can save your home from foreclosure. However, in our experience, loan modifications occur infrequently, and often provide little help even when granted. Many times, families are turned down for loan modifications because they lack the income needed to pay even a reduced mortgage. Filing bankruptcy can aid in obtaining modifications, since bankruptcy reduces the amount of money paid to other creditors. Also, removing second mortgages in bankruptcy can have a similar effect, freeing up cash that can instead be applied to the First Mortgage.