Kentucky foreclosure laws: how the process works and how long it takes

• KRS 426.005 et seq.: Primary framework for judicial mortgage foreclosure. Requires the lender to file in Circuit Court. Covers court-ordered sale, Master Commissioner appointment, advertisement, and distribution of sale proceeds.
• KRS 426.010: When a court enters a final personal judgment for a set sum of money, such as a judgment against the borrower for the debt, an execution against the debtor's property can issue on it.
• KRS 426.560 et seq.: Requires public sales under a judgment to be advertised by newspaper publication under KRS Chapter 424, stating the time, place and terms of sale and describing the property, unless the parties agree otherwise or the property is appraised under $100.
• KRS 426.530: Gives the defendant and his or her representatives a right to redeem real property sold under a court judgment or order (other than an execution) within 6 months after the sale, but only if the sale did not bring two-thirds of the appraised value. Redemption requires the purchase price plus 10% yearly interest and the buyer's reasonable post-sale maintenance and repair costs.
• KRS 427.060: Homestead exemption of $5,000. Does not protect against foreclosure of a mortgage the owner gave on the home or against purchase money owed on it, and does not apply to a debt that existed before the home was bought or the improvements were built.
• KRS 426.005 (deficiency provisions): In an action to enforce a mortgage, the court can enter judgment both for the sale of the property and for the recovery of the debt against the borrower personally. After the commissioner's sale is confirmed and proceeds are applied, the lender may pursue a deficiency judgment for any remaining balance.

After foreclosure sale, the purchaser may need to obtain a court order for eviction. The federal Protecting Tenants at Foreclosure Act provides 90-day notice to bona fide tenants.

Surplus proceeds from the foreclosure sale (above the debt and costs) can go to junior lienholders or the former owner. Other lienholders named in the case cannot receive any of the proceeds until they have shown their right to them by answer and cross claim (KRS 426.006), and the Master Commissioner must account to the judge for all sale proceeds paid out.

Generally first in time, first in right. Kentucky recording statutes govern lien priority. Property tax liens have priority over all other liens including first mortgages.

An action on a written contract must be started within 15 years after the claim first accrued, but an action on a written contract executed after July 15, 2014, must be started within 10 years unless another statute provides otherwise (KRS 413.090(2); KRS 413.160). A suit to enforce a note payable at a definite time must be started within six years after its due date or accelerated due date (KRS 355.3-118). Which limit applies to a foreclosure depends on the loan documents and when they were signed; consult a local attorney. Applies to a note payable at a definite time: suit must be filed within six years after the due date, or after the accelerated due date if the loan was accelerated. In a Kentucky foreclosure case, the court can enter a personal judgment for the debt along with the order of sale (KRS 426.005). A money judgment becomes a lien on the debtor's real estate in any county where the creditor files a notice of judgment lien; a judgment lien created on or after June 29, 2023, expires 10 years after the final judgment was entered, unless its expiration is postponed as KRS 426.720 allows. Consult a local attorney.

Kentucky law sets no general right to catch up on missed payments and stop the foreclosure (KRS 426.005(2)). Whether an executor can bring the loan current depends on the mortgage terms.

• Unpaid property taxes: Property tax liens have priority over mortgage liens in Kentucky. Collection follows statewide rules: a third-party purchaser of a certificate of delinquency must notify the delinquent taxpayer within 50 days after buying it and again every six months until the pre-suit notice is sent, by certified mail with a copy to each mortgagee, and must send that pre-suit notice at least 45 days before filing suit (KRS 134.490). If the property is sold under a foreclosure judgment, it must be appraised, and the owner has the right of redemption in KRS 426.530 (KRS 134.546).

$5,000 (KRS 427.060). Does not protect against foreclosure of a mortgage the owner gave on the home, or against purchase money still owed on it, and does not apply to a debt that existed before the home was bought or the improvements were built. The federal bankruptcy exemption for a home ($31,575 in cases filed on or after April 1, 2025) is far higher. At $5,000, this exemption offers little real protection. Kentucky lets a debtor in federal bankruptcy use the federal exemptions in 11 U.S.C. § 522(d) (KRS 427.170), which are far more generous.

Kentucky extends the rights, benefits and protections of the federal Servicemembers Civil Relief Act (SCRA) to Kentucky National Guard members called to active duty under Title 32 or to state active duty by the Governor, if the orders are for 30 days or more (KRS 38.510). Under the federal SCRA, if you took out your mortgage before active duty, you generally can't be foreclosed on without a valid court order while you are on active duty and for 12 months after leaving active duty, and you can ask for a mortgage interest rate reduction to 6 percent for your time on active duty and for one year after.

Under the federal rule, qualified principal-residence debt may be excluded from income if canceled before January 1, 2026, or under an arrangement entered into and documented in writing before that date. Bankruptcy or insolvency exclusions may apply separately.