If you are letting your Indianapolis home go to Sheriff Sale because you owe more than it’s worth, you might think, "I'll just walk away and take the credit hit."
Think again. Unlike some states that protect homeowners, Indiana allows banks to sue you for the money they lost. This is called a Deficiency Judgment (Indiana Code § 32-29-7-5).
How It Works
- You owe $200,000 on your mortgage.
- The house sells at the Sheriff Sale for only $140,000.
- The bank doesn't just write off the $60,000 loss. They can sue you for it.
The 20-Year Garnishment
In Indiana, a judgment can follow you for up to 20 years. The bank can garnish your wages, freeze your bank accounts, and put a lien on any future house you try to buy.
The Alternative: A Short Sale or Fast Sale
To avoid a deficiency judgment, many homeowners seek to sell the property before the Sheriff Sale occurs. If you have equity, a traditional sale works. If you owe more than the home is worth, the solution is often a "Short Sale."
How Homebound Offers Can Help: We are cash buyers, not debt negotiators. However, we frequently make offers on homes in pre-foreclosure. We can submit a purchase agreement that you or your attorney can present to the bank. If a short sale is required, usually the next step would be to contact a licensed short sale negotiator or attorney. We can refer you to these professionals who can work with your lender to accept our purchase price as full payment for the debt.
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IMPORTANT LEGAL DISCLAIMER:
Homebound Offers is a real estate investment company. We are principal buyers, not attorneys, financial advisors, or licensed real estate agents. The information presented in this article is for educational purposes only and does not constitute legal, financial, or tax advice.
Real estate laws, including eviction, probate, and foreclosure statutes, vary by location and are subject to judicial interpretation. Every property situation is unique. The next step for any legal action should always be to contact a qualified attorney to review your specific circumstances. If you need a referral to a local professional, we may be able to provide a list of independent contacts.