The Right of Redemption in Vermont: How to Stop Foreclosure After Judgment

Having a judge in Burlington, Rutland, or Woodstock sign a Judgment and Decree of Foreclosure against your home feels like the final chapter, but under Vermont law, you still hold legal title and an ironclad statutory right to save your property. Unlike states where a foreclosure judgment leads immediately to a sheriff's lockout, Vermont grants homeowners an absolute Right of Redemption codified in 12 V.S.A. § 4941 and V.R.C.P. 80.1. As long as you satisfy the exact court-ordered redemption sum before the redemption deadline expires, the foreclosure judgment is completely extinguished and your ownership is restored free and clear of that mortgage default.

However, exercising the right of redemption after judgment requires paying off the entire accelerated debt rather than just catching up on missed monthly payments-and the court clerk's deadline is unforgiving to the minute. Consulting a local Vermont foreclosure and bankruptcy lawyer from our directory early in your redemption window is critical if you need to dispute inflated payoff charges, coordinate a refinance or private sale, or file a protective Chapter 13 petition before time runs out.

Calculating the VT Redemption Period Timeline and Legal Mechanics

When a Vermont Superior Court judge enters a Judgment and Decree of Foreclosure, the decree must state the exact dollar amount required to redeem the property, the per-diem interest rate accruing each day, and the exact calendar date on which the homeowner's redemption window closes.

Calculating the VT Redemption Period Timeline

How long you have to redeem your property depends on the type of real estate and whether the court ordered a strict foreclosure or a foreclosure by judicial sale:

• Standard 6-Month Residential Rule: Under 12 V.S.A. § 4941(c) (for strict foreclosure) and 12 V.S.A. § 4946(b) (for judicial sale), when the foreclosed property is a dwelling house of four units or less, the statutory redemption period is strictly six months from the date of the decree, unless a shorter time is ordered by the court based on specific statutory exceptions or written stipulation of the parties.
• Commercial, Agricultural, or Vacant Property: Under 12 V.S.A. § 4946(c), for commercial real estate, non-residential parcels, or properties proven to be vacant and abandoned, the judge has discretion to set a much shorter redemption period-often ranging from 30 days to 90 days.
• Sequential Redemption Windows for Junior Lienholders: Under V.R.C.P. 80.1(e), the homeowner (mortgagor) always gets the first redemption deadline. Subsequent judgment creditors, mechanics' lienholders, or second-mortgage holders are assigned staggered 5-to-10-day redemption windows in reverse order of priority immediately following the homeowner's expiration date.
• Extended Pre-Auction Redemption in Judicial Sales: Under 12 V.S.A. § 4946(b), if the court ordered a Foreclosure by Judicial Sale rather than strict foreclosure, the homeowner continues to hold the statutory right to redeem the property even after the initial 6-month period expires-right up until the public auction takes place!

Differences in Redemption for Primary vs. Vacation Homes

Because Vermont has one of the highest percentages of second homes, ski condos, and lakefront camps in the country-particularly in Stowe, Ludlow, Killington, Dover, and Warren-owners must understand how Vermont law treats primary residences differently from vacation properties during redemption:

How to Secure Funding to Redeem the Property

Because redeeming a Vermont foreclosure requires paying the entire accelerated loan balance plus accrued interest, escrow advances, and court costs-not merely the past-due installments-homeowners typically use one of four financial strategies during the 6-month window:

1. Conventional or Hard-Money Equity Refinance: If your Vermont home has strong equity (for example, you owe $180,000 on a property worth $350,000), specialized equity bridge lenders, private mortgage investors, or credit unions can refinance the debt and wire the exact redemption payoff before the court deadline.
2. Open-Market Sale During the Redemption Period: Because you remain the legal owner throughout the 6-month period, you can list and sell the house with a Realtor or FSBO, pay the court redemption sum directly out of the buyer's closing funds, and pocket 100% of your remaining home equity.
3. Reverse Mortgage Payoff for Seniors (Age 62+): Vermont homeowners aged 62 or older with substantial home equity can use a FHA Home Equity Conversion Mortgage (HECM) to pay off the foreclosure judgment in full and eliminate monthly principal and interest payments going forward.
4. Chapter 13 Bankruptcy Filing Before Redemption Expires: If you cannot raise a lump-sum payoff, filing a Chapter 13 petition in the U.S. Bankruptcy Court, District of Vermont, Burlington or the U.S. Bankruptcy Court, District of Vermont, Rutland using Form B 101, FED, U.S. Bankruptcy Court, Voluntary Petition for Individuals Filing for Bankruptcy before a judicial sale-or using the 60-day extension under 11 U.S.C. § 108(b) prior to strict foreclosure expiration-provides vital federal protection.

What Happens If the Vermont Redemption Deadline Is Missed by a Single Day?

In Vermont, the redemption deadline stated in a Strict Foreclosure Decree is an absolute cliff. Under 12 V.S.A. § 4941(e), if you fail to deliver certified funds to the Clerk of the Superior Court by the close of business on the exact expiration date-even if you are late by a single day-your equity of redemption is permanently foreclosed. The court clerk immediately issues a Certificate of Non-Redemption pursuant to 12 V.S.A. § 4941(e) and 12 V.S.A. § 4949, which the bank records in the local town clerk's land records to vest full, absolute ownership in the lender.

Worse still, in the landmark federal precedent In re Canney, 284 F.3d 362 (2d Cir. 2002), the U.S. Court of Appeals for the Second Circuit ruled that under Vermont strict foreclosure law, filing a Chapter 13 bankruptcy petition does not toll or pause the running of a strict foreclosure redemption period under the automatic stay (11 U.S.C. § 362); instead, 11 U.S.C. § 108(b) only extends the strict foreclosure redemption deadline by 60 days from the bankruptcy filing date-and if the Vermont redemption deadline had already expired even one day before the bankruptcy was filed, the property is permanently lost and no longer part of the bankruptcy estate.

Step-by-Step Process to Pay the Clerk of the Court and Redeem in Vermont

To execute a legal redemption in Burlington, Rutland, Montpelier, or Brattleboro without a last-minute rejection, follow the statutory procedure under 12 V.S.A. § 4941(e) and V.R.C.P. 80.1(e).

Step 1: Auditing the Foreclosure Judgment and Requesting an Exact Clerk Payoff

Locate your copy of the Judgment and Decree of Foreclosure and note the base redemption sum, the exact date interest started running, the daily per-diem interest dollar figure, and the exact redemption expiration date. At least 10 to 14 business days before your deadline, contact the clerk of the court where the decree was entered-such as the Vermont Superior Court, Chittenden Unit, Civil Division, Burlington or the Vermont Superior Court, Rutland Unit, Civil Division, Rutland-to confirm the exact down-to-the-penny redemption total through your target payment date. As confirmed in Merchants Bank v. Lambert, 151 Vt. 204 (VT Supreme Court 1989), redemption figures and court procedures are strictly enforced.

Step 2: Delivering Certified Funds Directly to the Clerk of the Superior Court

Under V.R.C.P. 80.1(e) and 12 V.S.A. § 4941(e), the statutory method to redeem a foreclosed Vermont mortgage is to pay the full redemption amount directly to the Clerk of the Superior Court (or directly to the plaintiff-lender only if the lender's attorney simultaneously delivers a signed discharge and stipulation of redemption). Court clerks do not accept personal checks for foreclosure redemptions; you or your closing attorney must deliver a bank cashier's check, certified check, or verified attorney IOLTA check payable to the Clerk of the Vermont Superior Court prior to 4:30 PM on or before the expiration date.

Step 3: Obtaining the Official Certificate of Redemption from the Court Clerk

Upon receiving the full redemption payment in good funds, the Clerk of the Superior Court executes and issues Form 100-00054, Vermont, Vermont Judiciary, Foreclosure Certificate of Redemption pursuant to 12 V.S.A. § 4941(e) (and 12 V.S.A. § 4949), certifying that the foreclosure judgment has been paid and satisfied in full.

Step 4: Recording the Certificate of Redemption in the Town Land Records

Under 12 V.S.A. § 4941(e) and 12 V.S.A. § 4949, a certified copy of the foreclosure decree and the Form 100-00054, Vermont, Vermont Judiciary, Foreclosure Certificate of Redemption must be recorded in the municipal land records of the town or city clerk's office where the property is located-such as the Burlington City Clerk's Office, Burlington or the Brattleboro Town Clerk's Office, Brattleboro. Once recorded, the certificate operates as a full legal discharge of the foreclosed mortgage and clears your title.

How Much Does it Cost in Vermont?

Redeeming a property in Vermont requires satisfying the full judgment balance plus specific court and municipal recording fees:

• Total Redemption Payoff Sum: 100% of the unpaid mortgage principal, accrued contract and per-diem interest, delinquent property taxes and hazard insurance advanced by the lender, the bank's $295 court filing fee, sheriff service costs, and court-approved lender attorney's fees (capped at 2% in uncontested cases under V.R.C.P. 80.1(f)).
• Superior Court Clerk Certificate of Redemption Fee: $0 to $25 administrative/certification fee when paying the redemption sum through the Vermont Superior Court, Washington Unit, Civil Division, Montpelier or other county civil clerks.
• Town or City Clerk Land Recording Fee: Strictly $15 per page under 32 V.S.A. § 1671(a)(1) to record the certified Foreclosure Decree and Form 100-00054, Vermont, Vermont Judiciary, Foreclosure Certificate of Redemption in the municipal land records.
• Vermont Real Estate or Foreclosure Attorney Fee: Typically $750 to $1,800 to audit the clerk's payoff accounting, coordinate refinance or sale escrow funds, deliver certified payment to the court clerk, and record the title-clearing certificates.

How Long Does the Process Take?

The standard redemption period for a 1-to-4 unit residential home in Vermont runs for exactly 6 months (180 days) from the date the judge signs the Foreclosure Decree under 12 V.S.A. § 4941(c) and 12 V.S.A. § 4946(b). Once you have refinance or sale funds ready, requesting a final payoff verification from the court clerk, delivering the cashier's check, and receiving Form 100-00054, Vermont, Vermont Judiciary, Foreclosure Certificate of Redemption takes 2 to 5 business days. If the deadline is missed and a Certificate of Non-Redemption is issued, the lender must record the decree within 30 days under 12 V.S.A. § 4941(e) and can then obtain a writ of possession under 12 V.S.A. § 4941(e) and V.R.C.P. 80.1 for sheriff eviction.

Frequently Asked Questions (FAQ)