Texas Commercial Law Firm
Foreclosure
On the other hand, safety has its price. Suing for judicial foreclosure when compared to self-help repossession and sale is time consuming and expensive. Judicial foreclosure requires filing suit, serving the debtor, filing motions, responding to motions, attending hearings and, potentially, trial. Once judgment is obtained, the creditor must obtain a writ of execution and a sheriff's sale of the property.
A creditor is not entirely safe from liability by pursuing judicial foreclosure, however, because an improperly conducted sheriff's sale may cause additional problems for the creditor. The fact that the debtor is responsible for any additional costs associated with a judicial foreclosure and with additional interest which accrues until the collateral is liquidated, is not particularly consoling to most creditors since it is uncommon to collect a deficiency from one so financially distressed they cannot pay their loan and suffer the loss of their property.
E. Foreclosure Sales of Personal Property Under the UCC, there are two procedures by which a defaulting debtor may be legally dispossessed of ownership of personal property. As a preliminary matter, both procedures require the notification of others who have a security interest in the property as reflected by their filing of a UCC financing statement with the Secretary of State or the County Clerk.
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