Kentucky Foreclosure Laws

All Kentucky foreclosures are decided through court proceedings. To begin a foreclosure, a lender must file a suit against a defaulted homeowner. The homeowner is granted 20 days in which to respond to the suit by either contesting it or paying off the default amount due. If neither of these instances occur, the court will rule in favor of the lender and schedule a foreclosure sale of the homeowner's property in order to reclaim the amount the lender has lost on the loan. The sale may be scheduled for no less than one month after the court's ruling. The court must also arrange for an appraisal of the property in order to determine the correct time for redemption rights.

To properly advertise a Kentucky foreclosure sale, a Notice of Sale must be printed in a local newspaper one weekly for three weeks leading up to the sale date. This Notice will contain the date, terms, and location of the sale. All postponements of the sale must be approved by the court.

On the day of the sale, a court official known as the Master Commissioner auctions off the homeowner's property to the highest bidder. The winning bidder must present the full amount of their bid immediately or arrange with the Master Commissioner to work out a payment plan with a bond. All sales are subject to the court's confirmation. If the sale is confirmed, the winning bidder is entitled to receive a deed to the property.

The homeowner's redemption rights depend on the sale price of the property. If the property sells for less than 2/3 of its appraised market value, the original homeowner is given a brief period of time in which to redeem ownership by paying the full amount of the winning bid plus any additional interest gathered. If the price exceeds 2/3 of the market value, there is no legal precedent for a period of redemption.

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