Foreclosure & Replevin

Van Sant Law, LLC represents financial institutions and other lenders with their collection needs. This usually consists of a lawsuit to collect under the terms of a note that is due and payable. If the note is secured by collateral, we will institute foreclosure proceedings in order to secure the collateral and satisfy all, or a portion of, the indebtedness. Under Georgia law, a creditor may utilize non-judicial foreclosure proceedings to foreclose on an interest in real property. Creditors can also avail themselves of replevin actions to foreclosure on an interest in personal property.

Foreclosure (foreclosure of real property)

Non-judicial foreclosure proceedings are the most common in Georgia and most security deeds or deeds of trust in the state include a right of sale clause which permits the lender to foreclose without going to court. The non-judicial foreclosure procedure begins with the scheduling of a foreclosure auction (unless the security deed requires it, lenders do not need to alert the debtor before initiating foreclosure). Some security deeds allow a debtor to halt foreclosure proceedings by paying the default amount and associated fees. However, Georgia foreclosure laws do not offer this right automatically. A debtor can nevertheless stop the foreclosure process by paying the total balance owing on the loan, this is sometimes referred to as the equity of redemption. A notice of sale must be published for four weeks before the auction in the county’s legal organ at least once a week. The notice must include mortgage information, debtor and lender names, property details, and details about the time and location of the auction. The foreclosure sales take place on the first Tuesday of every month.

Repleavin (foreclosure of personal property)

A Replevin is an action instituted by a secured creditor where the secured party seeks an order from the court allowing the secured party to repossess certain collateral pledged to the secured party under the terms of a note and/or security agreement. It is the tool used in Georgia to foreclose on personal property such as automobiles. Title 11 of the Uniform Commercial Code or a state statute such as O.C.G.A. 44-14-230 et seq. sets forth the procedures secured creditors must comply with in order to repossess the collateral while preserving any deficiency rights the secure party may have. A secured party’s rights are cumulative and it is often necessary to obtain a money judgment against the debtor by suing on the note. In order to obtain a writ of possession the secured party must petition the appropriate court by presenting an affidavit and petition which sets for the reason for the replevin the amount of the indebtedness, and a description of the collateral to be repossessed. The petition may be filed in the county where the personal property is located, or in the county where the defendant resides. Personal service of the petition is preferred, but tack and mail is permissible if the defendant cannot be located. Once served, the defendant has seven days to file an answer with the court. If the defendant fails to fie an answer, the court may grant a writ of possession on the fifteenth day. If the defendant files an answer, the court will schedule a hearing to rule on the secured party’s petition. In commercial transaction, where the security agreement clearly waives notice, the secured party may petition the court for an immediate writ of possession. Once the secured party obtains a court order granting the petition, the secured party will take the writ of possession to the marshal or sheriff to repossess the collateral. The collateral can either be retained in full satisfaction of the indebtedness or sold in a commercially reasonable manner in an effort to preserve a deficiency claim against the defendant. After the property is disposed of, the secured party should provide the defendant with an accounting which sets forth the surplus or deficiency.