Borrowers in Indiana get certain rights and protections in a home foreclosure. If you’re facing a foreclosure in Indiana, you should learn about the state’s foreclosure laws so you fully understand these rights and protections. For example, you’ll get the right to stop the foreclosure and reinstate the mortgage by catching up on the past-due payments. In most cases, you’ll also get the right to participate in a settlement conference to try to work out a deal with your lender to avoid a foreclosure. If you have a certain type of high-cost loan, you might be entitled to special protections during the process.
Below you’ll find more information about the main protections and features of Indiana’s foreclosure law, along with citations to the statutes so you can read the law yourself.
The citations to Indiana’s foreclosure statutes are:
We’ve summarized important parts of Indiana’s foreclosure laws below. You can find more detailed articles on various aspects of Indiana foreclosure law in Nolo’s Indiana Foreclosure Law Center.
Indiana foreclosures are judicial, which means the foreclosing party files a lawsuit in court in order to foreclose the home. Ind. Code § 32-29-1-3. (Learn more about judicial foreclosures.)
Indiana law requires the following notices.
Pre-foreclosure notice. If the home is your primary residence, the foreclosing party must mail a 30-day pre-foreclosure notice to you before filing a complaint (lawsuit) with the court. The notice must
Summons and complaint. The foreclosing party gives you notice of the lawsuit by serving you with a summons and complaint. You then get 20 days to file a written response with the court. (Learn more about the difference between a foreclosure summons and complaint.)
Notice regarding a foreclosure settlement conference. 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. Ind. Code § 32-30-10.5-8. (Learn more about foreclosure settlement conferences in Nolo’s article Indiana's Foreclosure Mediation Program.)
Notice of sale. 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.
Indiana law provides special protections against foreclosure to some military service members and to borrowers who take out a type of loan that is called a “high cost home loan” (a type of home loan where the interest rate or points and fees exceed certain amounts).
Protection against foreclosure for certain military service members. Indiana law extends the protections under the federal Servicemembers Civil Relief Act to members of the Indiana national guard ordered to state active duty for at least 30 consecutive days. Ind. Code § 10-16-7-23.
Protections regarding high cost home loans. A borrower in foreclosure may raise violations of the high cost home loan statute (which includes a prohibition on some balloon payments and increasing the interest rate after a default, among other things) as a claim, counterclaim, or defense to foreclosure. Ind. Code § 24-9-5-1.
In addition, a borrower may cure the default and reinstate a high cost home loan at any time until title is transferred to the purchaser after the foreclosure sale. Ind. Code § 24-9-5-2.
“Reinstating” is when the borrower catches up on the defaulted mortgage's missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
In Indiana, if the borrower reinstates before the court enters judgment, the foreclosure must be dismissed. If the borrower reinstates after judgment, but prior to the sale, the foreclosure must be stayed (postponed). The foreclosure can proceed if the borrower subsequently misses another payment. Ind. Code § 32-30-10-11.
In some states, the borrower can redeem (repurchase) the home within a certain period of time after the foreclosure. In Indiana, however, the homeowner can't redeem the home after a foreclosure sale. Ind. Code § 32-29-7-13. (To get details on redemption rights in Indiana, see Nolo’s article If I lose my home to foreclosure in Indiana, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
In Indiana, there is usually a three-month waiting period between the time that the foreclosing party files the lawsuit and the order of sale. Ind. Code § 32-29-7-3. If the borrower waives the waiting period with the foreclosing party’s consent, then the foreclosing party cannot get a deficiency judgment. Ind. Code § 32-29-7-5. (Generally, deficiency judgments are allowed in Indiana. For a summary of the deficiency law in Indiana, see Indiana Laws on Post-Foreclosure Deficiency Judgments.)
If the former homeowners don’t leave the home after an Indiana foreclosure, the foreclosing party (usually the foreclosing party) may proceed with an eviction as part of the foreclosure lawsuit. Ind. Code § 32-30-3-1.