Hello and welcome to Money Girls Quick and Dirty Tips for a richer life.

I'm your host Laura Adams.

As the national foreclosure rate continues to rise,

I've had several people ask me how it differs from bankruptcy.

In this episode, I'll give you an overview of both legal processes

and how they can affect your financial future.

You're probably aware that foreclosure is the final option that a lender has when a borrower doesn't pay their loan.

It's a forced sale of the real estate that secures a loan.

The proceeds of the sale allow the lender to recover all or a portion of the amount they're owed by the borrower.

The foreclosure process varies from state to state.

I'll put a link in the show notes where you can compare the state-specific foreclosure laws.

But when property is said to, quote,

be in foreclosure, this means that the owner's lender

has begun the legal process to force the sale of the property.

It starts once the sale of the property.

It starts once the lender files a public notice in the county records called a notice of default

or list pendants.

This puts everyone on notice that the borrower is facing foreclosure.

If payments are not submitted to make the loan current,

the lender's next step is to announce the date of the foreclosure sale

by filing a notice of sale. The foreclosure sale by filing a notice of sale.

The foreclosure sale is actually an auction that normally takes place on the steps of the county courthouse.

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