A foreclosure in Indiana won't start as soon as you miss a payment. Under federal law, the lender must typically wait at least 120 days before filing a foreclosure lawsuit in court. This waiting period gives the borrower time to seek a foreclosure alternative, like a loan modification or another option. Indiana law gives homeowners additional rights, such as allowing participation in an alternative dispute resolution process called a "settlement conference" to work out a deal with the lender to stop the foreclosure.
In this article, you’ll learn about the Indiana foreclosure process and homeowner rights.
What Is the 120-Day Rule for Foreclosure?
Under federal mortgage servicing laws, if you fall behind on your mortgage payments, the servicer usually can't officially start a foreclosure until you are more than 120 days delinquent. During this waiting period, you may submit a loss mitigation application asking for foreclosure avoidance assistance. If you don’t qualify for help, the lender can file a lawsuit (see below) to begin a foreclosure. (12 C.F.R. § 1024.41 (2025).)
Preforeclosure Notice Requirement in Indiana
If the property is the borrower’s primary home, the lender must send a notice at least 30 days before starting the foreclosure. The notice will:
- state that the borrower is in default
- encourage the borrower to speak with a mortgage foreclosure counselor
- explain what the borrower can do if the lender gets a judgment of foreclosure, and
- provide contact information for the Indiana Foreclosure Prevention Network, which provides mortgage payment assistance and foreclosure avoidance counseling to eligible applicants. (Ind. Code § 32-30-10.5-8 (2025).)
How Does the Foreclosure Process in Indiana Work?
Indiana foreclosures are judicial in nature. The lender files a lawsuit in court and serves a copy to the borrower along with a summons. If the borrower doesn’t file an answer to the bank’s suit, the lender automatically prevails, and the court issues a default judgment stating that the property will be sold to pay off the mortgage debt.
If the borrower answers the suit, the case will go through the litigation process. Should the court decide that the lender wins, it will issue a judgment and order permitting the lender to sell the home at a foreclosure sale.
Before the sale, the sheriff (who will conduct the sale) posts a notice of the sale at the courthouse and advertises it in a newspaper for three weeks, starting at least 30 days before the sale. The sheriff also serves a copy of the notice of sale to the homeowner. (Ind. Code § 32-29-7-3 (2025).)
What Rights Do I Have in an Indiana Foreclosure?
In Indiana, homeowners get the opportunity to participate in a settlement conference, which is an alternative dispute resolution process that can help the owner avoid foreclosure. Indiana law also provides owners with another option: they can bring the account current and "reinstate" (resume making payments under) the mortgage. Or you could redeem the property by paying off the entire mortgage debt before the sale or consider filing for bankruptcy.
Settlement Conference
If the home is the borrower’s primary residence, the foreclosure paperwork will include a notice informing the owner about how to take part in a foreclosure settlement conference. The conference affords the owner an opportunity to attend a meeting with the lender and a facilitator to attempt to work out a way to keep the home or relinquish the property without going through a foreclosure. (Ind. Code § 32-30-10.5-8 (2025).)
Reinstating the Mortgage
Under Indiana law, the borrower can stop the foreclosure by reinstating the mortgage (paying all missed payments, fees, and costs in one lump sum) before the sale takes place. The lender must dismiss the foreclosure if you reinstate before the court enters a judgment. If you reinstate after judgment but before the sale, the court will stay (postpone) the foreclosure. The bank can proceed, however, if you miss another payment in the future. (Ind. Code § 32-30-10-11 (2025).)
Keep in mind that you might be able to qualify for another alternative to foreclosure after applying for a loss mitigation option.
Does Indiana Have a Redemption Period After a Foreclosure Sale?
Some states allow a homeowner to get the property back after the foreclosure sale by “redeeming” it (paying off the unpaid loan, plus interest, attorney's fees, costs, and any other legal charges). Indiana law, however, doesn’t provide the foreclosed homeowner the right to redeem the home after a foreclosure sale. (Ind. Code § 32-29-7-13 (2025).)
You can, however, redeem the property before the foreclosure sale.
Does Indiana Allow Deficiency Judgments?
When the foreclosure sale price isn't enough to pay off the outstanding balance on the home loan, a deficiency balance occurs. If the lender gets a personal judgment against the borrower for the deficiency balance, it is called a "deficiency judgment."
Indiana law allows the lender to get a deficiency judgment, but only under certain circumstances. After the foreclosure lawsuit begins, the lender can't sell the home in most cases for at least three months. A three-month waiting period is typical for owner-occupied properties, but this time frame may be longer for older mortgages. (Ind. Code § 32-29-7-3 (2025).) The borrower can waive the waiting period and there's a benefit for doing so—once waived, the lender can't get a deficiency judgment. (Ind. Code § 32-29-7-5 (2025).)
If the borrower doesn't waive the waiting period and the lender gets a deficiency judgment, the bank can then use standard collection practices, such as taking funds out of your bank account (bank levy) or your paycheck (wage garnishment), to collect the balance. In some cases, you might want to consider eliminating the deficiency by filing for bankruptcy.
Where Can I Find Indiana’s Foreclosure Laws?
To find Indiana’s foreclosure laws, go to the Indiana Code (sections 32-30-10-1 through 32-30-10-14, 32-29-1-1 through 32-29-1-11, and 32-29-7-1 through 32-29-7-14.) Keep in mind that statutes change, so checking them is always a good idea. How courts and agencies interpret and apply laws can change. And some rules can even vary within a state. These are just some of the reasons to consider consulting a lawyer if you're facing a foreclosure.