It can be difficult enough to pick up the pieces and move on with your life after losing your home to foreclosure. Many homeowners simply do not consider, “Will I owe money after foreclosure?” Sadly, the answer may be “yes.” Because of this possibility, it is important to take any notice of foreclosure you receive seriously. Not only can you lose your home, but you might be required to continue paying the lender even after you’ve lost your home.
What is a Deficiency Judgment?
When your mortgage lender forecloses on your home, they’ll attempt to sell your home to recoup as much money as possible. Depending on how much you owed, the value of your property, and other conditions, the foreclosure sale may not cover the full amount you owed to your lender.
If this is the case, the lender could go to court to obtain a deficiency judgment. A deficiency judgment allows your lender to take legal action against you to recover the difference between what your home sold for and what you still owe (this is known as a “deficiency”).
Can Your Lender Sue You for the Deficiency?
If your lender goes to court and obtains a foreclosure against you, they are allowed to file a motion after foreclosure to recover the deficiency you still owe. If they obtain a deficiency judgment against you, they may be able to put a lien on your remaining assets, garnish your wages, and take additional steps to claim the money they’re still owed under the terms of your mortgage.
Exceptions and Considerations
In Florida, state law says that your lender cannot file for a deficiency judgment unless the fair market value of your home is less than what you still owe your lender. Additionally, your lender only has one year from the date the foreclosure sale is completed to file for a deficiency judgment. Furthermore, just because your lender is allowed to seek a deficiency judgment against you does not necessarily mean that they will, especially if you have few assets that they could claim to make up for the deficiency.
If your lender does file for a deficiency judgment against you, it’s up to a judge to determine the final amount the lender can receive. With help from a foreclosure lawyer, you may be able to convince a judge to minimize the amount you have to pay back to your lender. A foreclosure defense lawyer can also discuss other defenses you may be able to raise.
What If You Can’t Pay the Deficiency?
If you can’t pay back a deficiency after a foreclosure, there are a few ways the case could proceed. If you have any remaining assets that could cover the deficit, your lender might go after them, or you could sell them yourself. You might also be able to have a deficiency judgment discharged by filing bankruptcy.
Contact a Foreclosure Attorney Today
Don’t let the banks take advantage of your situation. Instead, talk to an experienced Florida foreclosure defense lawyer about your rights and legal options. The Florida foreclosure defense lawyers at Loan Lawyers have over 100 combined years of experience and have saved over 3,000 homes in Florida from foreclosure. Let us evaluate your situation during a free consultation today.
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Loan Lawyers is made up of experienced consumer rights attorneys who use every available resource to develop comprehensive debt solution strategies. Our goal is to take on those burdens, resolve those problems, and allow our clients to sleep soundly knowing they are on the path to a better future.
