Kentucky Counties

State Auction Process in Kentucky

Kentucky is a tax lien state, which means that if a property owner fails to pay their property taxes, the county can foreclose on the property and sell it at a public auction. The auction is typically held at the county courthouse, and the highest bidder at the auction will be awarded the property. The buyer will then need to pay the taxes that were owed on the property, as well as the auction price.

This lien lasts for eleven years from the date when the taxes become delinquent. It includes all related expenses, such as interest, penalties, fees, commissions, costs, and attorney fees. Kentucky offers an interest rate of up to 12% on tax lien certificates. This means that investors who purchase tax liens can earn interest on their investment.

Kentucky utilizes the premium bid method for tax lien auctions. The county sets a starting bid, which includes back taxes, penalties, interest, and administrative costs. During the auction, investors have the opportunity to bid higher amounts for the tax lien certificate. The highest bidder will be awarded the certificate of delinquency.

Here are some additional details about the state auction process in Kentucky:

The auction is typically held on the first Tuesday of the month.
The auction is open to the public.
The buyer must pay a 10% deposit at the time of the auction.
The buyer has 30 days to pay the balance of the purchase price.
The buyer is responsible for paying the property taxes that were owed on the property.

Foreclosure in Kentucky

In Kentucky, lenders may foreclose on a mortgage in default by using the judicial foreclosure process. It begins when the lender files a lawsuit against you in court. You will then have the opportunity to respond to the lawsuit. If you do not respond, the lender may be able to get a default judgment against you. This means that the court will order the sale of your property.

Generally, in judicial foreclosure, a court decrees the amount of the borrower’s debt and gives him or her a short time to pay. If the borrower fails to pay within that time, the clerk of the court then advertises the property for sale.

At some point prior to the scheduled date of foreclosure, an appraisal of the property must be made. If the foreclosure sale price is less than two-thirds of the appraised value, the borrower has a period of one year (12 months) from the date of the sale to redeem the property by paying the amount for which the property was sold, plus interest.

It is possible to obtain a deficiency judgment against the borrower for the difference between the amount the borrower owed on the original loan and the foreclosure sale price, but only if the borrower was personally served with the lawsuit, or failed to answer.

What is deficiency judgment?

A deficiency judgment is a court judgment that allows a lender to collect additional money from a borrower who has defaulted on a loan if selling the property that secured the loan isn’t sufficient to pay off the entire debt. Deficiency judgments are most common after mortgage foreclosures, although they are not allowed in every state.

Quick Facts

– Judicial Foreclosure Available: yes
– Non-Judicial Foreclosure Available: No
– Primary Security Instruments: Mortgage
– Timeline: Varies
– Right of Redemption: Yes
– Deficiency Judgments Allowed: Yes, but with restrictions