How fast can you lose real estate if the debt is secured by a mortgage

30.10.2020 Dmitrijs Sustovs, head of the Litigation department of the Law

In case the debt repayment is secured by a mortgage (real estate pledge), then the law provides for a simplified debt collection procedure. The creditor has the right to submit an application to the court for undisputed enforcement of obligations. The application is examined by a single judge within 7 days from the date of submission of the application, without informing either the applicant or the debtor.

A judge’s judgment on the performance of obligations in an undisputed manner has the force of an enforcement document and it cannot be appealed.

Enforcement of the judgment is carried out by a bailiff.

Upon commencement of enforcement, the bailiff sends a notice to the debtor stating the obligation to enforce the judgment within 10 days.

If the debtor does not repay the debt, the bailiff takes a number of organizational measures to conduct the real estate auction.

Thus, the bailiff orders a real estate appraisal from a certified appraiser to determine the value of the forced sale of the real estate.

The creditor and the debtor are informed about the appraisal, explaining their right to request a reassessment of the real estate within 10 days of the notification. If neither the creditor nor the debtor requested a reassessment within the specified term or the claim was rejected, then at the end of this term the bailiff shall place an advertisement for the auction in the official publisher “Latvijas Vēstnesis” and on the electronic auction website. The advertisement shall indicate, inter alia, the start and end dates of the auction.

The auction takes place within 30 days from the day of the start of the auction.

At the end of the auction, an auction deed is drawn up, which indicates the acquirer who offered the highest price for the real estate.

Within 30 days from the end of the auction, the acquirer is obliged to pay the purchase fee and pay the duties for the approval of the auction deed and the consolidation of property rights.

The bailiff then submits to the court an application for approval of the auction deed and for the consolidation of property rights in the name of the acquirer.

The court shall examine this application in a written procedure within 30 days from the date of submission of the application.

An additional appeal against the judge’s decision may be filed with the regional court within 10 days. The decision of the regional court is final and cannot be appealed.

As can be seen from the above, the whole process of debt collection after a mortgage and receiving money takes at least four to four and a half months.

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