A common way to temporarily stop a foreclosure (up to) a few days before an auction (and when a homeowner does not need to otherwise declare bankruptcy) may be to file a Temporary Restraining Order (TRO).
A Temporary Restraining Orders (TRO) is a legal order filed by an attorney on behalf of a homeowner against their lender. In most cases, it will result in a brief delay (30-60 days, give or take) of a foreclosure auction – which may provide enough time for a homeowner to sell a home using other strategies, or catch up the payments. Typically a TRO will need to be accompanied with an executed contract from an investor to purchase the property or a good documented reason that the court should grant you a TRO.
Advantages and Disadvantages
The advantage of a TRO is that it can be done at the last minute just before the home is actually auctioned off by the lender.
In addition, it does not require the homeowner to declare bankruptcy and thus often both a bankruptcy and foreclosure can be avoided. Once the TRO is filed, the auction is stopped or nullified until the lender has the TRO lifted.
The disadvantage to filing a TRO is that it costs money and is only a temporary delay.
Before (or in conjunction with) exploring this option, make sure you talk to a Mike about all of your options! Regardless of your situation, income, or equity, if you would like to discuss all of your options for selling your home quickly to avoid foreclosure.
Common Questions About TROs
Question: How and How Much?
Answer: Generally you consult with a TRO attorney and complete the paperwork. Attorneys charge different fees for this. We have seen this cost around $2000-$2500 for most people. This is a specialized area of law. we recommend the Texas law firms of Ryan Daniel, Attorney at ryandaniellaw.com , James Minerve, Attorney at minervelaw.com, David J. Willis, Attorney & Broker at LoneStarLandLaw.com, or the Law Offices of T. Alan Ceshker at Ceshker.com
Question: Does a TRO Stop Foreclosure?
Answer: Yes, temporarily. TROs delay a foreclosure until the lender files a motion to have the TRO lifted. This almost always happens.
Question: Are there alternatives?
Answer: Yes. We’ve covered many options throughout this website.
A Temporary Restraining Order (TRO) is a court-issued order that temporarily prohibits certain actions from being taken until a full hearing can be conducted. It’s important to note that specific laws and procedures regarding TROs may vary depending on the jurisdiction, but that’s why we use a lawyer to make it happen.
In the context of a real estate foreclosure, a TRO can halt or delay the foreclosure process temporarily. Here’s how it typically works:
- Filing a Petition: To obtain a TRO, the homeowner or their legal representative must file a petition with the appropriate court. The petition must include a request for a TRO and provide valid reasons why the foreclosure should be stopped or delayed.
- Demonstrating Grounds: Providing an executed purchase contract is the most common form of demonstrating grounds with a TRO. The petitioner can also present compelling arguments to the court, supported by evidence, to demonstrate that immediate and irreparable harm will result if the foreclosure proceeds. This could include showing that there are serious legal or procedural issues with the foreclosure process, or that the homeowner will suffer severe financial or personal consequences if the foreclosure is not halted.
- Ex Parte Hearing: In urgent situations, the court may conduct an ex parte hearing, which means that only the petitioner’s side is presented. The judge will evaluate the evidence and determine whether to grant a TRO. It’s crucial to note that a TRO is typically issued without the opposing party (e.g., the lender) having the opportunity to present their side of the case.
- TRO Issuance: If the court determines that there are valid grounds, it may issue a TRO. This order will temporarily prohibit the foreclosure from proceeding until a full hearing can be conducted. The TRO will specify the duration of the restraining order, which is typically limited, usually ranging from a few days to a few weeks.
- Notice and Full Hearing: After the TRO is issued, the court will schedule a full hearing where both parties can present their arguments and evidence. The lender will have an opportunity to contest the TRO and provide their justifications for proceeding with the foreclosure. At the full hearing, the court will make a final decision on whether to continue the restraining order or allow the foreclosure to proceed.
It’s important to remember that a TRO is a temporary measure and not a permanent solution to stop foreclosure. It provides a brief reprieve to allow the court to thoroughly assess the situation before making a final decision. Homeowners seeking to halt a foreclosure should consult with an attorney experienced in real estate and foreclosure laws(we listed 4 law firm recommendations above) to understand the specific legal requirements and processes in their jurisdiction. First things first is to call Mike at Real Property Hero to discuss options which are better at stopping a foreclosure than a TRO.