Judicial Foreclosures are proceedings in which an actual court case is filed of record. A judicial foreclosure has the following steps: First, a title search is ordered and reviewed. A title search is performed to determine who all the relevant parties to the proceeding are. Second, a Complaint for Foreclosure and Lis Pendens are filed. The complaint sets out what debt is owed, that payments have not been made towards said debt, and that real property of the debtor should be sold to satisfy the debt. A Lis Pendens is filed to cut off the claims of creditors who file a lien against the debtor in the time between the filing of the Lis Pendens and the completion of the sale. Third, a summons is issued by the court and served upon all defendants. The debtors and all creditors with liens filed in the county where the real property is located are named as defendants. From the date of service, the defendants have 20 days to file an answer (30 days if an out of state defendant) with the court. Failure to file an answer is the equivalent to agreeing to everything stated in the complaint. A hearing will be set without notice given to the debtor(s). If you file an answer, you will be given notice of a hearing. Fourth, a hearing will be held. At the hearing, the judge will decide the validity and amount of the debt and priority of payment as between different debts of different creditors with liens. If found to owe the debt and to be in default of payments, a Decree of Foreclosure will be entered. For those who fail to file an answer, a Decree of Foreclosure will almost automatically be entered against you at the hearing. Fifth, the debtor has 20 days to pay the judgment in full. Sixth, a sale date is set and notice of the sale is published in a local newspaper. Seventh, the sale is held. Eighth, a report of sale is filed and a deficiency judgment may be sought against the debtor(s) for any amount of the judgment not paid in full by the sale. Ninth, an Order Confirming Sale is then entered. Tenth, a Commissioner's Deed is executed and recorded in the real property records where the real property is located.

NOTE: The above procedural steps are for general informative purposes only and do not include every step to be completed by an attorney in a judicial foreclosure.

A Judicial Foreclosure is superior to a Nonjudicial/Statutory Foreclosure in that the different procedural steps are endorsed by a judge. Mistakes are much less likely to result in a voided proceeding and are usually much easier to correct. Also, the creditor must file a seperate action within 12 months after the sale in order to obtain a deficiency judgment in a nonjudicial/statutory foreclosure.


ARKANSAS CODE OF 1987 ANNOTATED
TITLE 18. PROPERTY
SUBTITLE 4. MORTGAGES AND LIENS
CHAPTER 49. ENFORCEMENT OF MORTGAGES, DEEDS OF TRUST, AND VENDORS' LIENS

Arkansas Code Annotated Section 18-49-101 Limitation of actions.
(a) In suits to foreclose or enforce mortgages, deeds of trust, or vendor's liens, it shall be sufficient defense that they have not been brought within the period of limitation prescribed by law for a suit on the debt or liability for the security of which they were given.
(b) When any payment is made on any existing indebtedness, before it is barred by the statute of limitations, the payment shall not operate to revive the debts or to extend the operations of the statute of limitations, with reference thereto, so far as it affects the rights of judgment lienholders and judgment creditors and third parties, unless the mortgagee, trustee, or
beneficiary shall, prior to the expiration of the period of the statute of limitation, execute, acknowledge, and record a written instrument reflecting the amount and date of payments made or shall endorse a memorandum of the payment with date thereof on the margin of the record where the instrument is recorded, which endorsement shall be attested and dated by the clerk.
(c) In all cases where an indebtedness is secured by any mortgage, deed of trust, or instrument in which a vendor's lien is retained, the mortgage, deed of trust, or vendor's lien may be enforced or foreclosed at any time within the period prescribed by law for foreclosing mortgages or deeds of trust so far as the property mentioned or described in the deed of trust, mortgage, or other instrument is concerned. However, no claim or debt against the estate of a dead person shall be probated against the estate, whether secured by mortgage, deed of trust, or instrument retaining a vendor's lien, or not, except within the time prescribed by law for probating claims against estates.
(d) The holder of a vendor's lien, whether as the original beneficiary or as the assignee or transferee thereof, must note on the margin of the record where the vendor's lien is recorded payments relative to the indebtedness secured thereby. If the payments are not noted on the margin of the record, then the debt shall become barred, as to third parties, after five (5) years from the maturity of the indebtedness or after five (5) years from the date of the last payment, if any, which may be noted on the margin of the record, thereby subjecting evidences of indebtedness secured by vendor's lien to the same provisions and limitations provided by law in connection with evidences of indebtedness secured by mortgages or deeds of trust.
Arkansas Code Annotated Section 18-49-102 Defense of payment or setoff.
In any action in a justice court or circuit court of this state where it is attempted to foreclose any mortgage or deed of trust or to replevy, under a mortgage, deed of trust, or other instrument any personal property, the defendant in the action shall have the right to prove or show any payment or setoff under the mortgage, deed of trust, or other instrument. Judgment shall be rendered for the property or the balance due thereon, and the defendant may pay the judgment for the balance due and costs within ten (10) days and satisfy the judgment and retain the property.
Arkansas Code Annotated Section 18-49-103 Judgment.
(a) It shall not be necessary in any action upon a mortgage or lien to enter an interlocutory judgment or give time for the payment of money, or for doing any other act. In such cases, final judgment may be given in the first instance.
(b) In the foreclosure of a mortgage, a sale of the mortgaged property shall be ordered in all cases.
(c) In an action on a mortgage or lien, the judgment may be rendered for the sale of the property and for the recovery of the debt against the defendant personally.
(d) Whenever a mortgagee reasonably believes that mortgaged property has or will be affected by a release or threatened release of any hazardous substance including, but not limited to, those defined by 42 U.S.C. § 9601(14), (22), or § 8-7-403(a)(8), or § 8-7-503(8), the mortgagee may proceed against the mortgagor personally to recover the debt, without need to first seek a sale of the mortgaged property.


Arkansas Code Annotated Section 18-49-104 Sale of property under court order and publication of notice of sales.
(a)(1) Sales of personal property made by order of the court shall be on a credit of three months.
(2) Sales of real property made by court order shall be on a credit of not less than three months nor more than six months, or on installments equivalent to not more than four months' credit on the whole, to be determined by the court.
(b)(1) In all sales on credit, the purchaser shall execute a bond, with good surety, to be approved by the person making the sale, which bond shall have the
force of a judgment.
(2) In sales of real property, a lien shall be retained on the property for its price.
(c)(1) The mortgagee, trustee, or vendor shall publish a notice of the sale in a newspaper published and having a general circulation in the county in which the property is situated or, if this is not available, then in a newspaper of general statewide daily publication one time.
(2) The publication shall be at least ten days prior to the sale.


Arkansas Code Annotated Section 18-49-105 Proceeds of sale insufficient.
If the whole of mortgaged property does not sell for a sum sufficient to satisfy the amount due, an execution may be issued against the defendant as on ordinary judgments.

Arkansas Code Annotated Section 18-49-106 Redemption of real property.
In all cases where real property is sold under an order or decree of the chancery court, or a court exercising chancery jurisdiction in the foreclosure of mortgages and deeds of trust, the mortgagor, or his heirs or legal representatives, shall have the right to redeem the property so sold. This may be done at any time within one (1) year from date of sale, by the payment of the amount for which the property was sold, together with interest thereon, at the rate borne by the decree or judgment, and the cost of foreclosure and sale. The mortgagor may waive the right of redemption in the mortgage or deed of trust so executed and foreclosed.

Arkansas Code Annotated Section 18-49-107 [Repealed.]