They Quit Paying on a Credit Sale Deed. Now What?
- Hampton Law Firm ⚖️
- May 31
- 8 min read
Coffee Shop Series | Hampton Law Firm
Let’s talk about this like we are sitting at the coffee shop.
You sold somebody a piece of property. Maybe it was land. Maybe it was a house. Maybe it was family property. Maybe you were trying to help someone who could not get traditional financing. So instead of requiring the full purchase price at closing, you agreed to let the buyer pay over time.
And now they have quit paying.
Or maybe you are on the other side of the table. Maybe you bought property on payments, you have fallen behind, and now you have received papers from the sheriff or heard the word “foreclosure.” Your stomach drops, and the first question is simple: What happens now?
The first thing to understand is this: a credit sale deed is not something to treat like a handshake deal. Once title has transferred, the legal remedy usually looks more like foreclosure than simply “taking the property back.”
Before anyone can know what to do next, the first question is not simply whether payments stopped. The first question is: What exactly did everyone sign? People use a lot of words loosely in real estate transactions. They may say owner financing, bond for deed, credit deed, credit sale, rent to own, private mortgage, seller financing, or agreement for deed. Those terms are not all the same thing, and in Louisiana, the difference matters.
A credit sale usually means the buyer received title up front but still owes money to the seller. The seller may be protected by a vendor’s privilege, a mortgage, a promissory note, and language allowing foreclosure if the buyer defaults. A bond for deed is different because title generally does not transfer until later, after the buyer pays according to the agreement. That difference matters because the remedy is different.
So before anyone starts talking about changing locks, cancelling an agreement, filing foreclosure, or sending threats, the documents need to be reviewed. The answer usually begins with the deed.
If you are the seller, do not assume you can simply take the property back because the buyer quit paying. This is where people can get themselves into trouble. If you sold property by credit sale deed and the buyer received title, you may not still own that property, even if the buyer owes you money, even if they are behind, even if they promised they would pay, and even if you feel like you were trying to help them and they failed to keep their end of the deal.
If title transferred, you usually need to enforce your security rights. That may mean foreclosure. The good news is that Louisiana law may give you a strong remedy if your documents were prepared correctly. The hard part is that the paperwork has to be right.
If someone came into my office and said, “They quit paying on a credit sale deed,” I would want to see the documents before giving a straight answer. I would want to review the credit sale deed, any promissory note, any mortgage language, the vendor’s privilege language, the payment terms, the default provisions, any acceleration clause, any confession of judgment language, proof of recordation, the payment history, any written notices sent to the buyer, and any later modifications or agreements.
I would also want to know what has happened in real life since the sale. Is the buyer living on the property? Is anyone else claiming an interest? Are property taxes owed? Is insurance being maintained? Has anyone filed bankruptcy? Has anyone died, creating a succession issue? Are there other creditors? Has the property been damaged, leased, transferred, or listed for sale?
Because real life always finds a way to make simple paperwork complicated.
If the buyer is behind but wants to catch up, then the first conversation may be about practical solutions rather than immediate foreclosure. Not every missed payment has to become a courthouse fight. Sometimes the seller wants payment more than the property. Sometimes the buyer had a temporary setback. Sometimes a written repayment agreement, refinance, payoff deadline, sale of the property, consent judgment, or other negotiated solution may solve the problem.
But everyone has to be careful. If the seller keeps accepting partial payments without documenting the agreement clearly, the seller may create confusion about default, waiver, or modification. If the buyer keeps promising to catch up but never does, the seller may lose valuable time. If the goal is to work it out, the agreement should be put in writing, and the writing should match the legal documents.
Foreclosure may be on the table when the buyer is in default and there is no realistic plan to cure it. This may be especially true when payments have stopped, the buyer will not communicate, promises keep getting broken, taxes or insurance are not being maintained, the property is being damaged, the buyer is trying to sell or transfer the property without paying the seller, bankruptcy or other creditor issues have appeared, the buyer disputes the amount but provides no records, or the seller is worried that the security is losing value.
At that point, the issue is no longer just, “They owe me money.” The issue becomes, How do I protect the debt secured by this property?
In plain English, foreclosure after a credit sale deed usually means the creditor is trying to enforce the debt through the property. If the documents support it, the creditor may be able to file for executory process, which is Louisiana’s faster foreclosure procedure. The creditor files a petition with the court and attaches documents showing the debt, the mortgage or privilege, and the confession of judgment.
If the judge finds the paperwork sufficient, the court signs an order for a writ of seizure and sale. That writ goes to the sheriff. The sheriff seizes the property and serves notice of seizure. The notice should include important information, including sale information and information about the debtor’s rights to raise defenses or procedural objections. Then the property is scheduled for sheriff’s sale.
That is the part people do not always understand. The seller does not simply walk back into ownership. The property is generally sold through the sheriff’s sale process. The seller or creditor may be able to bid at that sale, but the process still has to be followed.
If you are the buyer and you receive foreclosure papers, do not put them in a drawer. Do not assume it will take forever. Do not assume that calling the seller is enough. Do not assume the sale will stop just because you are trying to get money together.
Executory process can move quickly. If you have defenses, you usually need to raise them before the sale. You may need to review whether the amount claimed is correct, whether the seller gave proper notice, whether the documents allow executory process, whether the note or deed is authentic, whether the seller is the right party to foreclose, whether payments were credited correctly, whether the debt is legally enforceable, and whether bankruptcy, refinance, payoff, reinstatement, negotiation, or sale of the property is an available option.
Waiting makes everything harder.
Sellers often say, “I just want the property back.” I understand why. If someone quit paying, damaged the property, or ignored you, it feels natural to want the property returned. But legally, if the buyer owns the property, foreclosure may mean the property is sold at sheriff’s sale. The seller may bid at that sale, but it is still a legal process.
This is not the same as changing locks on a rental property. It is not the same as telling someone to move out. It is not the same as cancelling a handshake agreement. It is enforcing a debt secured by immovable property.
Appraisal matters more than many people realize. Sometimes foreclosure documents waive appraisal, and at first that may sound helpful because it may make the sale process easier. But appraisal can matter if the creditor later wants to pursue the buyer for a remaining balance after the sale.
If the property sells for less than what is owed, the unpaid balance is called a deficiency. In Louisiana, if a creditor wants to pursue a deficiency after executory process, appraisal rules matter. So before rushing forward, the seller needs to think about the bigger strategy. Do you only want the property sold? Do you want to preserve the right to pursue a remaining balance? Do you want to negotiate a payoff? Do you want to bid at the sheriff’s sale? Those questions matter before the foreclosure is filed.
If the documents were not done correctly, then there may be a problem. If the credit sale deed does not properly reserve the vendor’s privilege, if the act was not properly recorded, if the documents do not import confession of judgment, if the note is missing, if assignments are unclear, or if the documents are not authentic, executory process may not be available.
That does not always mean the seller has no remedy. It may mean the seller has to use ordinary process instead. Ordinary process is more like a regular lawsuit. It usually takes longer and involves citation, delays, defenses, and a judgment before seizure and sale. That is why I often say that the best foreclosure work happens at the closing table. If the documents are prepared correctly from the beginning, default is easier to deal with later.
If you are thinking about doing a credit sale, please do not copy something from the internet and hope for the best. A credit sale deed should be drafted with the worst-case scenario in mind, not because you expect the buyer to fail, but because if they do, you need documents that actually work.
Before entering into a credit sale, think carefully about who owns the property after signing, how payments will be made, what counts as default, whether there is a grace period, whether written notice is required, whether the debt can be accelerated, whether there is a promissory note, whether there is a mortgage, whether a vendor’s privilege is reserved, whether confession of judgment language is included, whether appraisal is waived, who pays taxes and insurance, and what happens if the buyer dies, files bankruptcy, damages the property, or stops communicating.
That may not feel warm and friendly at the beginning of a deal, but it can prevent a legal mess later.
The bottom line is this: if you are the seller, the question is not just, “Did they quit paying?” The better question is, What do my documents allow me to do? If you are the buyer, the question is not just, “Am I behind?” The better question is, Has foreclosure started, and what deadline am I facing?
A credit sale can be a good tool, but when payments stop, it becomes very document-specific and very deadline-sensitive. So before you change locks, send threats, ignore papers, or assume you know what happens next, get the deed reviewed.
Because in Louisiana, the answer usually lives in the documents.
Need access to ongoing legal support and attorney guidance? Subscribe Here.
Not sure where to get started? Submit our secure intake form here.
Need more custom legal advice? Book your private consultation here via phone, zoom or in office options.
Judith L. Hampton
Attorney At Law
Hampton Law Firm
Disclaimer: This article is not legal advice. It is provided for general information and educational purposes only. Reading this article does not create an attorney-client relationship. Legal rights and obligations depend on the specific facts, documents, deadlines, and applicable law in each case. If you need advice about your situation, you should consult with a licensed attorney.
Comments