Deficiency Judgement

What is a deficiency judgement?

A deficiency judgement is a judgment against a borrower in favor of the lender in an amount equal to the difference between the funds received from a court sale of property and the balance remaining on a mortgage or other loan.

There can be deficiency judgements against you for your mortgage on your home, your vehicle, or any other properties with liens against. Many people file bankruptcy on deficiency judgement. This may not be the best thing to do especially when it comes to defaulting on your mortgage. There are other ways to get out of deficiency judgements.

What is deficiency?

A deficiency is the difference between what is owed on the real estate property and what the property is sold for. Usually the property is sold at an auction and the borrower may be subject to a lawsuit for the balance called a deficiency judgement.