Foreclosure Process and Laws in Indiana

When you default on your mortgage payments in Indiana, the clock starts ticking on a complex legal process called "foreclosure" that could ultimately cost you your home. However, Indiana, like about half the states in the United States, doesn't allow nonjudicial foreclosures. In Indiana, lenders must file a lawsuit to begin the foreclosure process. So, this judicial process adds a layer of formality and, potentially, time to the proceedings.

Indiana foreclosure laws and some federal laws specify how foreclosures work and give you rights and protections throughout the process.

What Are My Foreclosure Rights in Indiana?

Both federal and state laws govern foreclosure procedures in Indiana, and your mortgage contract gives you rights during the process.

Your Mortgage Rights in Indiana

When you get a loan to buy residential real estate in Indiana, you'll likely sign two documents: a promissory note and a mortgage.

• Promissory note. The promissory note is the document that contains your promise to repay the loan along with the repayment terms.
• Mortgage. The mortgage is the document that gives the lender a security interest in the property. If you fail to make the payments, the mortgage gives the lender the right to foreclose and sell the home auction so it can recoup the money it loaned you.

You also get rights under the promissory note and mortgage. For example, if you're late making your monthly payment, most promissory notes provide a grace period of ten to fifteen days before you'll incur late charges. To find out the grace period in your situation and the amount of the late fee, check the promissory note.

If you default on payments, most mortgages require the lender to send you a breach letter (a preforeclosure notice) before officially starting a foreclosure. This notice tells you that the loan is in default. If you don't cure the default, the lender can accelerate the loan (call it due) and proceed with the foreclosure.

Your Rights Under Federal Foreclosure Laws

In most cases, federal mortgage servicing laws require the servicer to contact you (or attempt to contact you) by phone to discuss foreclosure alternatives, called "loss mitigation" options, no later than 36 days after a missed payment and again within 36 days after each following missed payment. (12 C.F.R. § 1024.39 (2025).)

No more than 45 days after a missed payment, the servicer must let you know in writing about loss mitigation options that could be available and assign personnel to help you. There are a couple of exceptions to these requirements, like if you file for bankruptcy or tell the servicer not to contact you under the Fair Debt Collection Practices Act. (12 C.F.R. § 1024.39) (2025).)

Federal law also generally requires the servicer to wait until the loan is over 120 days delinquent before officially starting a foreclosure. But in a few situations, like if you violate a due-on-sale clause or if the servicer is joining the foreclosure action of a superior or subordinate lienholder, the foreclosure can begin sooner. (12 C.F.R. § 1024.41 (2025).)

Protections If You're in the Military

If you're in the military, the federal Servicemembers Civil Relief Act provides certain legal protections against foreclosure.

Other Foreclosure Rights

In addition, you have the right to:

• get a preforeclosure notice
• attend a settlement conference
• receive notice of the foreclosure and the opportunity to respond
• get current on the loan to prevent a foreclosure sale
• pay off the loan to prevent a sale
• file for bankruptcy, and
• get any extra proceeds after a foreclosure sale

Once you understand the Indiana foreclosure process, you can make the most of your situation and protect your rights.

What Are the Different Types of Foreclosure in Indiana?

Indiana is a judicial foreclosure state. All foreclosures go through the court system.

Preforeclosure Notice Requirement Under Indiana Law

If the home is your primary residence, the lender must mail a preforeclosure notice not later than 30 days before filing a lawsuit to foreclose with the court. The notice has to:

• inform you (the borrower) that you're in default
• encourage you to obtain assistance from a mortgage foreclosure counselor
• inform you of your rights after a foreclosure judgment, and
• provide the contact information for the Indiana Foreclosure Prevention Network (IFPN). (Ind. Code § 32-30-10.5-8 (2025).)

The breach letter might contain this information.

What Are the Steps in the Indiana Foreclosure Process?

Again, Indiana requires the lender to file a lawsuit in court to foreclose. The lender gives notice of the suit by serving you a summons and complaint. In most cases, you'll then get 20 days to file a written response with the court.

Indiana's Foreclosure Settlement Conference Program

If the home is your primary residence, the summons must include a notice about your opportunity to participate in a foreclosure settlement conference to try to work out an alternative to foreclosure, like a loan modification. You get 30 days after service of the complaint to request a settlement conference. (Ind. Code § 32-30-10.5-8 (2025).)

What Happens If You Do—or Don't—File an Answer

If you fail to answer the court action, the lender can get a default judgment from the court. The judgment will give the lender permission to hold a foreclosure sale. But if you respond to the lawsuit by filing an answer, the case will go through the litigation process. The lender might then request the court to grant summary judgment. A summary judgment motion asks that the court grant judgment in favor of the lender because there's no dispute about the case's critical aspects. If the court grants summary judgment for the lender or you lose at trial, the judge will order the home sold at a foreclosure sale.

Notice Requirements for Foreclosure Sales

But before a property can be sold at a foreclose sale, the sheriff (the party that conducts the sale) must post a notice of the sale at the courthouse and advertise the sale in a newspaper for three weeks with the first advertisement occurring at least 30 days before the sale. The sheriff must also serve a copy of the notice of sale to you (the homeowner) at the time of the first advertisement. (Ind. Code § 32-29-7-3 (2025).)

How Indiana Sheriff's Sales Work

The process ends with a foreclosure sale. The lender usually makes a bid on the property using a "credit bid" rather than bidding cash. With a credit bid, the lender gets a credit up to the amount of the borrower's debt. Sometimes, the lender bids the full amount of the debt; sometimes it bids less. The highest bidder at the sale becomes the new owner of the property.

After the sale, the sheriff gives a deed of conveyance to the purchaser and files a deed in the county records. (Ind. Code § 32-29-7-10 (2025).)

Eviction After an Indiana Foreclosure

If the foreclosing lender is the high bidder at the sale, it may proceed with an eviction against the former owners as an extension of the foreclosure action.

What Options Are Available to Borrowers During or After Foreclosure?

You might be able to prevent a foreclosure sale by reinstating the loan, redeeming the property before the sale, filing for bankruptcy, or working out a loss mitigation option, like a loan modification, short sale, or deed in lieu of foreclosure.

Reinstating the Mortgage Before the Foreclosure Sale in Indiana

"Reinstating" is when the borrower brings the loan current by paying the missed payments of principal and interest, plus fees and costs. Completing a reinstatement will stop the foreclosure.

In Indiana, if you reinstate before the court enters judgment, the foreclosure must be dismissed. But if you reinstate after judgment but before the sale, the foreclosure must be stayed (postponed). The foreclosure can proceed if you subsequently miss another payment. (Ind. Code § 32-30-10-11 (2025).)

No Redemption Period After a Foreclosure Sale in Indiana

Some states have a law that gives a foreclosed homeowner time after the foreclosure sale to redeem the property. In Indiana, however, the homeowner can't redeem the property after a foreclosure sale. (Ind. Code § 32-29-7-13 (2025).)

You do get the right to redeem the property before the sale. However, in practice, borrowers rarely redeem prior to a foreclosure sale. Most homeowners facing foreclosure lack the financial means to pay off the entire loan balance, plus additional fees and costs. People who have access to sufficient funds to redeem typically don't fall behind on their mortgage payments in the first place. Those who do have some funds available often use them to reinstate the loan or continue making payments until their financial situation improves.

How Filing for Bankruptcy Can Help in an Indiana Foreclosure

If you're facing a foreclosure, filing for bankruptcy might help. In fact, if a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy. Once you file for bankruptcy, something called an "automatic stay" goes into effect. The stay is basically an injunction that stops the lender from foreclosing on your home or otherwise trying to collect its debt, at least temporarily.

In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months. Or, if you want to save your home, filing for Chapter 13 bankruptcy might be the answer. To find out the options available, speak with a local bankruptcy attorney.

Deficiency Judgment Following a Foreclosure Sale in Indiana

Sometimes, a foreclosure sale doesn't bring in enough money to pay off the full amount owed on the loan. The difference between the sale price and the total debt is called a "deficiency balance." Many states, including Indiana, allow the lender to get a personal judgment, called a "deficiency judgment," for this amount against the borrower.

Generally, deficiency judgments are allowed in Indiana. But you might be able to avoid one. Indiana law usually requires a three-month waiting period between the time that the lender files the lawsuit and the order of sale. (Ind. Code § 32-29-7-3). If you waive the waiting period with the lender's consent, then the lender can't get a deficiency judgment. (Ind. Code § 32-29-7-5 (2025).)

What Are the Possible Consequences of Foreclosure?

The main consequence of foreclosure, other than losing your home, is that your credit scores will fall. The foreclosure will remain in your credit history for seven years, making it challenging to get future loans or credit at a low interest rate.

Also, you might face a deficiency judgment (see above) if the foreclosure sale doesn't cover the outstanding debt. You might also have trouble finding new housing because of your credit history.

Resources for Indiana Homeowners

The Indiana Foreclosure Prevention Network provides free assistance to Indiana homeowners facing foreclosure. Also, the Polis Center offers a "foreclosure dashboard" for Indiana showing foreclosure filings in the state and other foreclosure information, such as the average time from the foreclosure filing to the first hearing.

You can learn more about federal mortgage servicing laws and foreclosure relief options on the Consumer Financial Protection Bureau (CFPB) website.

A HUD-approved housing counselor can provide helpful information (at no cost) about various alternatives to foreclosure.

Getting Help from an Indiana Foreclosure Lawyer

Foreclosure laws are complicated. Servicers and lenders sometimes make errors or forget steps. If you think your servicer or lender failed to complete a required step, made a mistake, or violated state or federal foreclosure laws, you might have a defense that could force a restart to the foreclosure, or you might have leverage to work out an alternative. Consider talking to a local foreclosure attorney or legal aid office to learn about your rights.

A lawyer can also tell you about different ways to avoid foreclosure.