Deficiency Judgments After Foreclosure

foreclosure defense lawyersDeficiency Judgments

A deficiency judgment can be taken against you when your property is sold at a foreclosure sale for less money than you owe on the mortgage. By example, if you owe on your mortgage $500,000 and your property sells in foreclosure for $300,000, the financial institution can take a deficiency judgment against you for the balance of the $200,000 that you owe. Lenders will go after deficiency judgments, generally speaking, if they feel you have an ability to pay the balance of the judgment off.

Deficiency judgments are not automatic. The attorneys for the foreclosing bank must engage in further legal action to obtain a deficiency judgment against you. In cases where the financial institution does not believe that you have the capability of paying a deficiency judgment, they generally won’t go after a deficiency judgment.

How To Avoid Deficiency Judgments?

There are a variety of ways of avoiding a deficiency judgment. One of these involves selling your home at a short sale and having the bank agree they will not go after you for any deficiency between the amount the property is sold for and how much you owe. The second route to avoiding a deficiency judgment is filing a bankruptcy.

Deficiency judgments are taken against you in New York State Courts. If you file a bankruptcy in the United States Bankruptcy Court, under federalism, the federal court that you file the bankruptcy in is a higher court than the New York State court. You can discharge any deficiency owed by you with regard to your mortgage by filing a Chapter 7 bankruptcy in a Federal Court. In addition to avoiding a deficiency judgment, you can also avoid credit card debts, personal loans and other financial obligations by filing a bankruptcy.

Foreclosure Lawyer

There are a specific set of laws dealing with deficiency judgments in foreclosure lawsuits. These statutes are complicated. Each and every foreclosure situation is a separate individual case with different facts and different circumstances. The purpose of this article is to educate you that deficiency judgments can occur. Should you have concerns about a deficiency judgment or other issues in foreclosure legal action, it is important you contact an experienced, knowledgeable foreclosure defense lawyer to represent you.assistance for homeowners

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