How do banks collect deficiency judgements

In this event, Florida law permits a lender to get a deficiency judgment against the borrower for the amount of the final judgment of foreclosure minus the fair market value of the property at the date of the sale. There are two ways a lender can get a deficiency judgment in Florida:. It is important to note that entitlement to a deficiency judgment is the rule rather than the exception, and is within the sound discretion of the court.

Stat; Lloyd v. Cannon , So. Usually, a Florida court will grant a deficiency judgment, unless the market value of the foreclosed property at the time of the sale equals the amount of the final judgment of foreclosure, or particular equitable defenses are sustained. Reid v. Compass Bank , So. In addition, if the foreclosed property is a one-family to four-family dwelling, the deficiency action must be brought within one 1 year after the day the certificate was issued by the clerk of court, or the day after the mortgagee accepted a deed in lieu of foreclosure.

The purchase price of the property at a foreclosure sale is irrelevant in calculating a deficiency judgment. A deficiency exists only when the judgment amount is more than the fair market value of the property on the date of the foreclosure sale, which is not determined by the foreclosure sale price.

If you're concerned about the cost of consulting an attorney, consider contacting your local legal aid organization. If a creditor is trying to collect on a deficiency, speak with an attorney who is licensed in your state and familiar with debt collection.

This is a legal action, and you need legal help. It may be possible to fight the collection efforts or limit how much collectors can take, but you need a skilled attorney to review your case. Bankruptcy might also be an option for wiping out a deficiency judgment, but there will be side-effects including potential damage to your credit.

Federal Trade Commission. Internal Revenue Service. Nonrecourse Debt. Actively scan device characteristics for identification. Use precise geolocation data. Select personalised content. Create a personalised content profile. Measure ad performance. Select basic ads. No attorney-client relationship exists by reading this article. This article should not be used as a substitute for legal advice from a licensed professional attorney in your state. Lucas B.

Rocklin is a creditor rights attorney. He has extensive experience in representing financial institutions and creditors in workout and litigation matters commercial and consumer including collections, foreclosures, bankruptcy and landlord-tenant litigation. Attorney Rocklin also practices labor law including collective bargaining agreement negotiations and arbitrations. Skip to content. Chapter 13 is a payment arrangement whereby you pay back a portion of your debts over 36 to 60 months.

Any remaining debt with a few exceptions is discharged after your final payment, including a mortgage deficiency. As with Chapter 7, a Chapter 13 debtor may avoid a lien arising from a deficiency judgment that attaches to exempt property.

Sometimes, you can challenge the foreclosure before it gets to a sheriff's sale. Mortgage foreclosure defense gives debtors the opportunity to defend against the foreclosure action. In addition, it is possible to reach a settlement with the mortgage lender to modify the mortgage in some cases. The key to dealing with a deficiency judgment or a potential deficiency judgment is information.

Know your options, so you can protect your assets and avoid unnecessary financial damage. Philadelphia Bankruptcy Attorney is published by Harborstone Law. Harborstone Law represents clients in bankruptcy and debt relief cases throughout Philadelphia and the surrounding Pennsylvania counties. Evergreen Ave. Suite Philadelphia, PA Kennedy Boulevard Philadelphia, PA Phone Number. Time Select a time Morning am - pm Afternoon pm - pm Evening pm - pm.

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No office visit is required. We can have a consultation over the phone or via video, such as FaceTime, Skype, or Zoom. We'll be in touch. One of our attorneys will contact you soon. Deficiency Judgments After Foreclosure By:. Quick Note: The potential for a deficiency judgment is one reason that it is not necessarily a good idea to walk away from a mortgage loan without consulting a bankruptcy lawyer or mortgage defense attorney.

Although deficiency judgments are not common in Pennsylvania, some circumstances may make one more likely. An attorney can review your situation and give you peace of mind. Quick Note: If you fail to answer the lender's petition to fix value, the court may accept the lender's claimed value without question.

Moreover, it is not enough to challenge the bank's valuation. You must provide evidence supporting your contention that the value is higher than the bank claims. Therefore, it is crucial to consult an experienced attorney immediately if the lender serves you with a petition to fix value. Quick Note: If you are considering a deed-in-lieu or short sale, it is crucial to have an attorney to review the documents.