- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust, Mortgage
- Timeline: Typically 60 days
- Right of Redemption: Yes
- Deficiency Judgments Allowed: Varies
In Michigan, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
In judicial foreclosure, a court decrees the amount of the borrowers debt and gives him or her a short time to pay. If the borrower fails to pay within that time, then the court will issue a notice of sale.
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A "power of sale" clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the "Power of Sale Foreclosure Guidelines".
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
A notice of sale must be published once a week for four (4) in a newspaper of general circulation in the county where the property is located. The notice must also be posted on the property at least fifteen (15) days after the first notice of sale is published.
The notice must contain the borrower and lenders name, a description of the property, the terms of the sale and the time, place and date of the sale.
The sale must be made at public auction to the highest bidder. The trustee or the sheriff of the county, if different, may conduct the sale between the hours of 9:00 am and 4:00 pm on the date specified in the notice of sale.
The sale may be postponed by posting a notice at the time and place where the sale was to originally be held. If the postponement is for more than one week, it must also be published in the manner as the original notice of sale was given.
Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.
First, there are other options besides letting the house go into foreclosure. You might be able to give a deed in lieu of foreclosure, for one.
Whether there will be a suit for deficiency depends on how they conduct the foreclosure. It is common for lenders in Michigan to foreclose on the entire balance of the loan, in a foreclosure by advertisement. In that case, the lender loses the opportunity to seek a deficiency judgment against you. If the lender bids less than the balance, they may seek to pursue a deficiency against you, in a civil lawsuit after the foreclosure.
The other method of foreclosure is judicial foreclosure and would in most cases result in a deficiency judgment against you.
You are covering a lot of ground with your questions, but in short, your accounts and income can't be garnished without a lawsuit and judgment first. You must receive notice before a lawsuit.
If you plan to engage in asset protection to avoid or delay your creditors, I would advise you to do so with the advise and planning by an attorney. Doing it without professional advise is foolhardy, and will not be satisfactory to you in the end.
Also, don't assume you cannot file bankruptcy and keep all your assets. Without a complete consultation, you will not know whether you can keep assets or not, in a Chapter 7 Bankruptcy.
This answer is not specific legal advise. No attorney client relationship has been established. It is general commentary on the question presented, without the benefit of a full disclosure of all relevant facts. Seek an in-person consultation with a licensed professional.
I highly recommend that you have an immediate consultation with a Michigan bankruptcy practitioner. Find practitioners near you by going to NACBA. com or BestCase.com. Good luck!
The comments above are a general discussion of the topic raised and not intended as actual legal advice