How foreclosure works in Kentucky

The notices you will receive in Kentucky, in order

1. Summons and complaint

   Served by the sheriff, or through a warning order attorney, after the servicer files in circuit court

   The complaint is the lender's lawsuit and the summons gives you 20 days to respond. Kentucky Housing Corporation explains that a notice of the pending action is filed at the same time so anyone checking the property records can see a foreclosure is underway. File a written answer within the 20 days, or the lender can ask for a default judgment.

   Ky. R. Civ. P. 12.01

2. Motion for default or summary judgment

   Filed by the lender after the answer deadline

   If you did not answer, the lender seeks a default judgment. If you did, it usually asks for summary judgment, which is a ruling without a full trial. The master commissioner may review the motion and recommend to the judge whether to sign the judgment, and may hold a hearing if your answer raises a real defense.

3. Judgment and order of sale

   Signed by the circuit judge

   This states how much you owe and orders the home sold. It can include a personal judgment against you for the debt. It must be served on every party who is not in default, so if you answered the case you should receive a copy.

   KRS 426.005; Ky. AP Part IV, § 4(2)

4. Order referring the case to the master commissioner

   Entered by the circuit court with or after the judgment

   This order sends the case to the master commissioner for the sale, and it starts the clock: the commissioner must sell within 90 days of the order of referral, unless the court extends the time by up to 30 days for good cause.

   Ky. AP Part IV, §§ 4(3), 5(1)

5. Appraisal

   Before the sale, arranged by the master commissioner

   Two disinterested people with real estate experience set the appraised value in writing, and the appraisal is filed in the court record before the sale. Get a copy from the court file. Your right to redeem later depends on whether the sale price is under two-thirds of this figure.

   KRS 426.520; Ky. AP Part IV, § 5(2)

6. Notice of sale

   Published at least once, 7 to 21 days before the sale

   The newspaper advertisement gives the time, place and terms of the sale, the case number, and the street address and parcel number of the property. The statewide rule requires only one publication, so do not expect weeks of warning.

   KRS 426.560; KRS 424.130; Ky. AP Part IV, § 5(3)

7. Report of sale, confirmation and deed

   Report within 3 business days of the sale; deed after the court confirms

   The commissioner's report must state the appraised value and the sale price. If no one files an objection, the court can confirm the sale, and the commissioner delivers the deed within 5 business days after confirmation and payment. A buyer can then get a writ of possession to have you removed.

   KRS 426.540; Ky. AP Part IV, § 5(5), (6)

The legal steps in Kentucky

1. Missed payments and early contact

   Under federal rules, a servicer generally cannot start a foreclosure case until you are more than 120 days behind. Kentucky law does not add its own pre-foreclosure notice. Use this time to call your servicer's loss mitigation department and reach a housing counselor or legal aid.

   12 C.F.R. § 1024.41(f)

2. The lender files a lawsuit

   The lender files a complaint in the circuit court of the county where the home is located, and you are served with a summons. You have 20 days after you are served to file a written answer. If you do not answer, the lender can ask for a default judgment.

   Ky. R. Civ. P. 12.01

3. Judgment and order of sale

   If the judge rules for the lender, the court enters a judgment that says how much you owe and orders the home sold. The judgment can also include a personal judgment against you for the debt. The case is referred to the master commissioner, and the judgment and order of sale must be served on every party who is not in default.

   KRS 426.005; Ky. AP Part IV, § 4(2)

4. Appraisal and notice of sale

   Before the sale, two disinterested people with real estate experience appraise the home, and the written appraisal is filed in the court record. The sale must be advertised in a newspaper at least once, between 7 and 21 days before the sale date. Write down the appraised value, because it decides whether you will have a right to redeem.

   KRS 426.520; KRS 426.560; KRS 424.130; Ky. AP Part IV, § 5(2), (3)

5. Master commissioner's sale

   The commissioner sells the home at public auction, usually at the courthouse, within 90 days after the order of referral (the court can add up to 30 days for good cause). The buyer pays cash or puts 10% down with the rest due in 30 days. Until the sale happens, you can still try to work out a deal with your servicer, though the servicer does not have to agree.

   KRS 426.700; Ky. AP Part IV, § 5(1), (4)

6. Report of sale and confirmation

   The commissioner files a report of sale within 3 business days, and the report must state the appraised value. If no one objects, the judge can confirm the sale, and the commissioner delivers a deed to the buyer after confirmation and payment. If you think the sale was not handled properly, talk to a lawyer right away about filing an objection.

   KRS 426.540; Ky. AP Part IV, § 5(5), (6)

7. Redemption (only in some cases) and moving out

   If the home sold for less than two-thirds of its appraised value, you have 6 months from the sale to buy it back. Even then, the buyer gets an immediate writ of possession, so you may have to move during those 6 months. Kentucky legal aid explains that the new owner gives 10 days' written notice and can then get a writ of possession for the sheriff to remove you.

   KRS 426.530

Common questions in Kentucky