How to Avoid a Deficiency Judgment After Foreclosure

Avoiding Deficiency Judgments In Foreclosure

Even after a foreclosure, you can still get a call from your mortgage lender claiming that you owe them even more money. Mortgage lenders can file a lawsuit against you after the foreclosure sale to obtain any additional money they claim is owed. This is known as a deficiency judgment, and it’s the difference between your original debt and the actual final sale price of your foreclosed house.

While some don’t have enough significant assets after a foreclosure to make them vulnerable to deficiency judgments, there are many instances where a lender can decide to sue you for a deficiency. In this post, our Brevard County foreclosure lawyers will discuss how you can avoid this outcome – and fight back if you are sued.

Research Foreclosure Laws in Florida

Thoroughly research the laws in your state, long before your house is foreclosed. Some states only allow for deficiency lawsuits if your foreclosure is actually ordered through the court, and others cap the amount lenders can retrieve between current market value and the outstanding debt. Because there are so many variations of these state laws, it’s critical that you do your research before foreclosure, and understand the potential consequences for your unique situation.

Understand the Value of Your Home

Make sure you understand the true value of your home and what you could potentially be held liable to pay if it were sold today. When the deficiency between market value and your original debt is significant, it may be time to look into other options beyond foreclosure, such as mortgage modification. This, along with other methods like a deed in lieu or debt consolidation options, can often be your best bet to avoiding a deficiency lawsuit.

What Happens If I’m Sued?

If you are still sued for a deficiency, there’s no need to panic. Working with a foreclosure attorney can help you find a more positive resolution with your mortgage lender, or get them to back down from the lawsuit altogether.

Even if you are handed a deficiency judgment from the court, you don’t have to be alone in this process. At The Buchalter Law Group, our debt relief attorneys have more than four decades of combined experience helping clients throughout Brevard County find financial freedom again, and offering skilled guidance on financial matters. We can help you explore all the options, and take a closer look at your finances, even if you can’t ultimately avoid a deficiency judgment.

For more information, contact us at (321) 320-6088 today! We offer free consultations in Brevard, Lake, Orange, Osceola, Seminole, & Volusia Counties.