Is There a Right of Redemption at a Sheriff’s Sale in Pennsylvania?
Losing your home in a sheriff’s sale can be a painful process. A sale is almost always permanent, as many homeowners won’t be able to redeem their property once sold in Pennsylvania.
The right of redemption is reserved for homeowners whose property has been sold in a sheriff’s sale because of unpaid real estate taxes in Pennsylvania. If your home was foreclosed upon and sold because of unpaid mortgage payments, you will not have a right of redemption. Because of this, it is important to stop a sheriff’s sale before it happens by declaring bankruptcy. You can then exempt your home from liquidation or consolidate all debts in a repayment plan. Bankruptcy provides a way for debtors to keep their homes and re-establish their financial security.
To schedule a free evaluation of your case with Young, Marr, Mallis & Associates, call (215) 701-6519 to speak with our Pennsylvania bankruptcy lawyers today.
What is a Right of Redemption for a Pennsylvania Sheriff’s Sale?
If your home was taken in Pennsylvania and subsequently sold in a sheriff’s sale, you might be able to redeem it if you act quickly enough. This only applies to homeowners whose properties have been sold at tax lien sheriff’s sales.
In Pennsylvania, the right of redemption is only reserved for those with delinquent property tax payments. Property cannot be redeemed if a home has gone through a mortgage foreclosure. This means that if your home was foreclosed upon and sold off in a sheriff’s sale because you missed mortgage payments, you will not be able to get your property back.
In Pennsylvania, eligible homeowners have nine months from the date their property is sold in a sheriff’s sale to redeem it. Unfortunately, the process is not so simple.
Suppose you want to redeem your property after it has been taken and sold. In that case, our Philadelphia bankruptcy lawyers can help you create a plan to address your financial situation and repay debts associated with your home. Typically, debtors have nine months from the recognition of the deed of a property, or when it is transferred to a new owner, to pay back all unpaid real estate taxes and other costs associated with the sale.
If you are eligible for the right of redemption but are unable to repay taxes out of pocket, Chapter 7 bankruptcy may allow you to do so within four to six months. Because your home was already sold in a sheriff’s sale, you would not have to protect it using liquidation exemptions. That said, other assets might be liquidated in order to repay debts and redeem your home in Pennsylvania.
What is the Redemption Period in Pennsylvania?
As briefly mentioned above, the redemption period is short in Pennsylvania and may only apply to specific cases. If your home is about to be sold in a sheriff’s sale, you should immediately discuss your situation with a lawyer. Once the sale happens, you have a small window in which you can redeem the property.
Time to Redeem Your Property
The time to redeem your property in Pennsylvania is only 9 months. This deadline begins to count down on the date the sheriff transfers the deed of the property. This is a tight deadline, to say the least. To make the situation even more dire, many people do not realize they have a redemption period for several weeks or months, and precious time is lost.
While the window of time to redeem your property is certainly narrow, you can and should begin making preparations before the clock starts counting down. The first thing you should do is discuss your case with a lawyer well before the sheriff’s sale occurs. Your attorney might help you determine if you have a right of redemption and begin taking steps to get your finances ready.
Depending on how much money you would need to pay to redeem the property, you might need all 9 months and then some to prepare. If time is too short and your finances are insufficient to redeem the property, you should discuss filing for bankruptcy as a way of holding onto the property. As talked about more below, our Pennsylvania bankruptcy lawyers can assist you in filing for bankruptcy to initiate an automatic stay on any legal proceedings against you or your property, including a sheriff’s sale.
Criteria for the Redemption Period
Not all cases involving a sheriff’s sale may be eligible for a redemption period. As discussed above, properties seized because of mortgage foreclosures are ineligible for redemption. A redemption period in Pennsylvania may only apply in cases of sheriff’s sales involving properties seized because of unpaid real estate taxes.
Not only that, but there are other criteria to meet before your case is eligible for a redemption period. To start, the property cannot be vacant and still be redeemed. A vacant property might be an abandoned house or a house nobody has lived in or used for quite some time. To be considered occupied, someone must live in the house for at least 90 days before the sheriff’s sale.
This is sometimes a problem for people dealing with a sheriff’s sale after the death of a loved one. For example, perhaps your elderly parent or grandparent passed away, and you did not realize that property taxes on their home were going unpaid. Meanwhile, your loved one’s home remained unoccupied. This is a perfect example of why you should meet with a lawyer as soon as possible.
To actually redeem your property, you must repay the value of the winning bid on the property. Not only that, but you might also have to cover various other expenses associated with preparations for the sheriff’s sale. Partial payments or payments on an installment plan are not acceptable and may not be used to redeem the property.
Who Can Take Advantage of the Redemption Period?
If you find yourself in the most of a sheriff’s sale, you should talk to your attorney about whether you can redeem the property or if someone else is eligible to do so. Under the law, a person who owns a property is usually the one eligible to redeem it. However, in some cases, the original owner is no longer around. Perhaps they passed away and left the property in question to an heir or heirs.
Other people might be qualified to redeem a property if the original owner is gone. You can redeem the property if you inherit the property or are the deceased person’s personal representative.
This can be a tricky question to sort out, especially if your loved one passed away without a will. Multiple family members might be claiming the property, while the 9-month deadline is getting closer and closer. If you are unsure who is responsible for the property or who can redeem it, speak to an attorney right away.
How to Redeem Your Property During This Period
Supposing you have the funds prepared to redeem your property. Your next step is figuring out what channels you must go through to make the redemption official. This is not a typical transaction, and dropping off a check might not be enough to redeem the property.
To redeem the property, you and your attorney must first file a petition to redeem the property before the 9-month deadline. You might have to prove to the courts that you have met the above-mentioned criteria, and that your property is eligible to be redeemed.
Payments are usually made to the person or entity who purchased the property. Some buyers are not keen on losing their newly acquired property, and they might challenge your attempt to redeem the property. As such, you and your lawyer should be prepared to defend your right to redeem.
What if I Don’t Have a Right to Redemption for My Property in Pennsylvania?
When your home is threatened with foreclosure and a possible sheriff’s sale because you have missed mortgage payments, it is crucial to stop the proceedings immediately. You will not have a right of redemption if unpaid mortgage payments are why your property is sold in a sheriff’s sale in Pennsylvania.
Get an Automatic Stay
An automatic stay can stop a sheriff’s sale in its tracks. When debtors declare bankruptcy in Pennsylvania, an automatic stay takes effect. This stops any debt collection efforts, including sheriff’s sales. This is an important step to take for debtors at risk of losing their homes because of mortgage foreclosure, as they won’t be able to redeem their property if it is eventually sold in a sheriff’s sale. Most debtors are eligible for automatic stays. If you have filed for bankruptcy several times in the recent past, an automatic stay might not last for the duration of your bankruptcy proceedings.
File for Chapter 13
If your main goal is keeping your home, it may benefit you to file for Chapter 13. This type of bankruptcy allows debtors to keep their assets, including their homes, while they repay their debts. While the means test will determine the bankruptcy chapter you can file for, you might be able to choose Chapter 13 if your income permits. Although debtors can use federal liquidation exemptions to protect certain property when filing for Chapter 7 in Pennsylvania, Chapter 13 all but ensures that your home remains in your ownership during bankruptcy.
Make a Repayment Plan
Instead of having to repay your debts in nine months to redeem property, debtors can do so over a period of three to five years with a repayment plan. Furthermore, a repayment plan will consolidate all of your debts under the same low-interest rate, meaning you can address your financial situation fully with a repayment plan, not only outstanding mortgage payments. Repayment plans must be submitted for approval within two weeks of declaring bankruptcy in Pennsylvania. While it may take you several years to complete a repayment plan, your home will be protected during that time because of the automatic stay.
If you choose Chapter 13 bankruptcy, eligible debts will be discharged only after you complete your repayment plan. In rare cases, there might be an exception, allowing debts to be discharged their debts at the beginning of the bankruptcy process. When a debt is discharged, it is effectively erased, meaning a debtor no longer have to repay it. In Chapter 13, dischargeable debts include medical bills, credit card payments, and personal loans, among others. Knowing that your other debts will eventually be discharged can allow you to focus on repaying debts associated with your home so that you can retain it once you exit bankruptcy and avoid a sheriff’s sale, where you would not have a right of redemption had your property been sold because of mortgage foreclosure.
Stop Foreclosure on Your Home in Pennsylvania
Call (215) 701-6519 to get a free case analysis from the Warrington, PA bankruptcy lawyers at Young, Marr, Mallis & Associates today.