Stripping Liens in Bankruptcy: Can my debtor do this?The non-judicial foreclosure process in Arizona is known as a Trustee’s Sale. The requirements to complete a valid trustee’s sale fully set forth in statute. For those professionals that are statutorily identified as being qualified to act in a trustee capacity, the process is a “paint by numbers” procedure.

A Trustee’s Sale is, by statutory design, meant to be quick and relatively simple. The entire Trustee’s Sale process occurs over a period of 91 days. Generally, if the Trustee follows the statutory requirements, a valid sale will occur unless another party takes action to stop the sale before the sale occurs. The basic timeline for a trustee’s sale is below.

Day 1
The Trustee records the Notice of Trustee’s Sale.

Day 5
The Trustee mails the Notice of Trustee’s Sale and Statement of Breach to those listed in the Deed of Trust (and those defined by statute).

Day 30
The Trustee mails the Notice of Trustee’s Sale and Statement of Breach to those in the Deed of Trust and those that have an interest in the Property.

Usually between day 20 and day 69
The Notice of Sale is posted at the property being sold and at the Superior Court Courthouse at least twenty days before the sale at (1) some conspicuous place on the property to be sold (if it can be done without a breach of the peace), and (2) at the places in the county courthouse provided for the posting of public notices.

Usually between day 20 and day 79
The Notice of Trustee’s Sale is published in a newspaper of general circulation in the county in which the trust property is located. The Notice must run once a week for four consecutive weeks with the date of last publication not less than ten days prior to the sale.

Day 91
The Trustee sells the property at the Trustee’s Sale.

Usually within 10 days after the sale
The Trustee’s Deed is recorded.

Once the sale occurs and the Trustee’s Deed is executed and delivered, the property will be vested in the party that purchased at the Trustee’s Sale, either the beneficiary or a third party.

There are many “behind the scenes” actions being taken by the trustee and their staff, to ensure that there is full statutory compliance. From the “outside looking in” perspective, the above timeline describes what will happen.

The statutes define many other items that must be completed. For example if a property owner believes the Trustee’s Sale is invalid, and the borrower wants to ‘stay’ a Trustee’s Sale, the stay must be obtained at least one business day prior to the scheduled Trustee’s Sale. If no stay is obtained, and the sale occurs, the issuance of the Trustee’s Deed brings with it a statutory presumption that all requirements to complete the sale were properly completed. If you are facing a Trustee’s Sale, retain counsel without delay. Time passes quickly, and if you want to stop the process, you must move promptly.

The attorneys at Windtberg & Zdancewicz, PLC provide clients with experienced legal representation in all litigation and bankruptcy matters. We are experienced in creditor’s rights prosecuting and defending garnishments, charging orders, attachment, property execution, trustee’s sales, foreclosures, judgments, judgment collection, domestication of foreign judgments, and creditor’s issues in bankruptcy cases. If you need assistance with your collection matters, please contact us at (480) 584-5660.