Other creditors, if there are any, take their share of the proceeds from the sale. Any remaining proceeds go to the debtor. Priority Real property is often encumbered by at least one lien. This lien is held by the bank that lent the debtor the purchase money. The bank is usually the creditor having first priority in a foreclosure sale.
Priority is the order in which creditors receive proceeds from the sale.
If Creditor Y enforces its lien to collect the money due by forcing a sale of the debtor s house, Creditor Y is second in line to receiving the proceeds from the sale. Bank X receives money first. The following example illustrates how this process works. In some states, the law gives debtors the right to cure the default and the right of redemption. The right to cure means that the debtor has the opportunity to pay off the amount of the loan due and avoid the foreclosure action prior to the entry of the final judgment of foreclosure.