Property is the ultimate form of collateral. In New Jersey, when you take out your mortgages and pay your taxes, you offer up your property and home as collateral in case you fail to meet said payments. You have title to the property but the lender or creditor has a lien on the property. If you cannot pay your lender, then said lender will be within their legal rights to go and collect on their collateral. That means you might lose your house and home when the authorities – led by the county sheriff -- set out to sell our property. This process, referred to as a sheriff sale, is a means to pay off the outstanding debt to the lender that you have accrued.
However, each state conducts sheriff sales in a different manner. The rules that govern each sale depends on the state the property is owned in. Sometimes, court decisions or changes in the laws drastically alter how sheriff sales are conducted, as well as how this alters how sales can be conducted.
Such is the case for New Jersey. The rules for adjourning sheriff sales changed significantly on July 28, 2019, when the New Jersey statute was modified impacting the rights and options of borrowers under New Jersey foreclosure law. N.J.S.A. 2A:17-36, governs the rules on adjournments of sheriff sales and provides:
Notwithstanding any other law or court rule to the contrary, a sheriff or other officer selling real estate by virtue of an execution may make five adjournments of the sale, two at the request of the lender , two at the request of the debtor, and one if both the lender and debtor agree to an adjournment, and no more, to any time, not exceeding 30 calendar days for each adjournment. However, a court of competent jurisdiction may, for cause, order further adjournments.
All of this sounds complicated. But how does this all this affect you? What does it mean to make an “adjournment of the sale”?
How Long is a Sheriff Sale?
For many years, there were standards in the state of New Jersey on how Sheriff Sales were conducted. A sheriff, after receiving the court-issued Writ to sell a foreclosed property, would have 120 days to sell the property. The owner remains in possession of the home until the sheriff sells the home to a new owner. Once the property has been sold, ownership has been terminated. However, the owner will have a statutory redemption period to reclaim the house from the purchaser in full.
However, the terms have altered that impact the Sheriff Sale from its beginning. Now, the lenders/Plaintiff (the bank or mortgage lender who has yet to receive payment) of the foreclosure are required to prepare the foreclosed property’s deed for the sheriff. This rule changed because of the requests by Plaintiffs and third-party purchasers for changes to the typical sheriff’s deed. It now places the burden on the plaintiff to prepare the sheriff’s deed providing the lender or third-party purchaser with new title to the property.
Another significant change is how long the sale can take place. The original 120-day period has been extended to 150 days. If a sheriff fails to conduct a sale within those 150 days, the lender/Plaintiff will be authorized to appoint a special master who can take hold of the property.
The Changes in Adjournment
Adjournments are temporary pauses in the sheriff sale process, used to temporarily pause or postpone the final sale of the foreclosed property. This period can be used to resolve the foreclosure without requiring the sale of the debtor’s home. This might require a loan modification or new payment plan. It can also be a period taken for the debtor to collect enough funds to pay off the Lender or file Chapter 13 Bankruptcy to nullify the impending sheriff sale.
However, the number of adjournments that can be taken are now far more limited than they were previously. In the past, the lender/plaintiff can issue an unlimited number of adjournments, while the debtor was entitled to only two fourteen-day adjournments. However, the new laws put into place alter how many adjournments both the debtor and lenders can put into place. Now, both parties are entitled to only two adjournments each. However, these pauses have been extended from fourteen days to twenty-eight days.
Additional adjournments can be made beyond the four mentioned above. One adjournment can be issued by the mutual consent of both the lender and debtor. On top of that, the court itself can issue an additional adjournment, if it sees the situation requires one.
The Value of This Change
Ultimately, all these changes affect a few major elements to the foreclosure process. This process prolongs the length a typical sheriff sale might take before reaching its resolution. By extending the number of days spent in the sale process, as well as extending the length of time it takes to resolve the sale, the state of New Jersey has made it easier for debtors to determine new ways to renegotiate debt with their lenders.
It also removes a degree of power away from the lenders. Previously, lenders possessed a far greater degree of control over the sheriff sale. Debtors now have double the amount of time to extend a sheriff sale.
On top of that, debtors have more time to raise funds and prepare for the sheriff sale, thanks to the extended period spent leading up to the sale, as well as the extended length of each adjournment.
It is important to understand that each county in New Jersey establishes their own rules and variations of the above. If you are seeking an adjournment of your sheriff sale, call the county sheriff and ask their requirements. Some sheriffs require proof of ID and a payment of $28. You will have to be careful because if the sheriff sale occurs you lose title to your property. The only way to put off sheriff sales are through an adjournment or filing bankruptcy.
For a list of county sheriff offices’ phone numbers and web sites, please see below:
• Atlantic County Sheriff (609-909-7200)
• Bergen County Sheriff (201-336-3500)
• Burlington County Sheriff (609-265-5127)
• Camden County Sheriff (856-225-5457)
• Cape May County Sheriff (609-463-6420)
• Cumberland County Sheriff (856-451-4449)
• Essex County Sheriff (973-621-4111)
• Gloucester County (856-384-4600)
• Hudson County Sheriff (201-369-4330)
• Hunterdon County Sheriff (908-788-1166)
• Mercer County (609-989-6111)
• Middlesex County Sheriff (732-745-3366)
• Monmouth County Sheriff (732-431-6400)
• Morris County Sheriff (973-285-6600)
• Ocean County Sheriff (732-929-2044)
• Passaic County Sheriff (973-881-4200)
• Salem County Sheriff (856-935-7510)
• Somerset County Sheriff (908-231-7140)
• Sussex County Sheriff (973-579-0850)
• Union County Sheriff (908-527-6309)
• Warren County Sheriff (908-475-6309)
If you wish to avoid a sheriff sale by filing Chapter 13 Bankruptcy or have any other financial problems that require legal counsel, then you need to find a bankruptcy attorney who can get the job done right. If you have questions regarding a potential bankruptcy, call the law firm of Scura, Wigfield, Heyer, Stevens & Cammarota, LLP for a free consultation.