How can I file an injunction bond to delay my foreclosure sale? – North Carolina

Short Answer

In North Carolina, you can ask a Superior Court judge to temporarily stop a power-of-sale foreclosure by filing a civil action for an injunction and posting a security bond the court sets. You must act before the foreclosure “rights become fixed,” which is generally during the 10-day upset-bid period after a sale. The judge decides whether to issue a temporary restraining order or preliminary injunction and will require a bond under Rule 65. If the sale later produces surplus funds, you claim them with the Clerk of Superior Court.

Understanding the Problem

In North Carolina, can a homeowner file an injunction bond with the court to temporarily halt a scheduled power-of-sale foreclosure? You are the property owner seeking a short pause before the sale, after loan modification papers were rejected for notarization issues. The immediate timing pressure is the sale date and, if the sale occurs, the 10-day upset-bid window.

Apply the Law

North Carolina law lets a property owner ask a Superior Court judge to enjoin (pause) a foreclosure sale upon filing a lawsuit and posting a bond the court requires. The request must be made before the parties’ rights become fixed, which typically occurs after the upset-bid period ends. The Clerk of Superior Court does not issue these injunctions; a judge does. If a sale goes forward and nets more than what is owed, the trustee must pay surplus funds to the Clerk, and claimants (including the owner) can apply to receive them based on legal priority.

Key Requirements

• Timely filing: File for an injunction before rights become fixed (usually before or during the 10-day upset-bid period).
• Lawsuit and motion: Start a civil action in Superior Court with a verified complaint and a motion for a TRO/preliminary injunction.
• Bond/security: Be prepared to post a bond set by the judge as a condition of the injunction under Rule 65.
• Grounds for relief: Show legal or equitable reasons to pause the sale (e.g., notice or statutory defects, or other substantive issues).
• Forum and notice: File where the property sits; promptly serve the substitute trustee and lender/servicer.
• Surplus funds option: If the sale proceeds and yields surplus, file a claim with the Clerk for distribution by priority.

What the Statutes Say

• North Carolina Gen. Stat. § 45-21.34 (Injunction to enjoin sale) – A judge may enjoin a foreclosure sale upon terms (including bond) before rights become fixed.
• North Carolina Gen. Stat. § 45-21.27 (Upset bids) – Establishes the 10-day upset-bid period that extends the sale timeline.
• North Carolina Gen. Stat. § 45-21.31 (Surplus proceeds) – Surplus is paid to the Clerk and distributed to those entitled.
• North Carolina R. Civ. P. 65 (Injunctions; security) – Courts require security (a bond) when issuing restraining orders or injunctions.

Analysis

Apply the Rule to the Facts: Because your modification papers were rejected for notarization problems, you can still ask a Superior Court judge to halt the sale, but you must show more than just unsuccessful loss-mitigation attempts. File quickly and be ready to post a bond the judge sets. If the sale occurs, watch the 10-day upset-bid period; only after that period ends do rights typically become fixed. If the final price exceeds what’s owed, you can file a claim with the Clerk for any surplus, subject to junior liens.

Process & Timing

1. Who files: Property owner. Where: Superior Court in the North Carolina county where the property is located. What: Verified complaint plus motion for Temporary Restraining Order (TRO)/Preliminary Injunction; proposed order; bond paperwork (corporate surety is commonly accepted and filed with the Clerk); service on trustee and lender. When: File as soon as you receive sale notice and before the sale; a TRO can be sought on short notice, and a preliminary injunction hearing typically follows within days.
2. If the sale occurs: The trustee files a Report of Sale; a 10-day upset-bid period starts and can restart with each upset bid. After the final upset period ends, the trustee must account and pay any surplus to the Clerk. You then submit a claim for surplus with supporting documents (ownership proof, payoff figures for junior liens).
3. Bankruptcy alternative (separate federal process): A bankruptcy filing can impose an automatic stay that pauses the sale if filed before the sale completes. If bankruptcy is not pursued or is dismissed, return to the state-court injunction or surplus-claim steps above.

Exceptions & Pitfalls

• A judge—not the Clerk—issues injunctions in foreclosure matters; do not wait for the foreclosure hearing to seek this relief.
• If you cannot post the required bond promptly, the court may decline to enter or continue an injunction.
• Pure loan-modification disputes usually are not enough; you need a substantive legal basis (for example, statutory notice defects or other sale irregularities).
• Service and timing are critical; a TRO is ineffective if the trustee is not notified in time.
• Surplus funds are subject to junior liens first; owners receive only what remains after valid subordinate claims.

Talk to a Surplus Funds Attorney

If you’re trying to pause a foreclosure sale or position yourself to claim any surplus funds, our firm has experienced attorneys who can help you understand your options and timelines. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.