What Is a Deficiency Judgment?
Is your lender coming after your property? Don’t think that just because your home is being foreclosed means your debts are behind you. In this blog, we explain what you need to know about deficiency judgments and foreclosure.
Deficiency Judgments Explained
A deficiency judgment can be ordered by a court if a lender wants to pursue the balance of your loan after your property has been foreclosed. The sale proceeds from your foreclosed property are supposed to go towards paying off your debt and other fees from your collection. However, if your property sells for an amount that isn’t enough to cover your debt, you will still owe money and the court can issue a deficiency judgment that makes you liable for the balance.
Here’s an example of how a deficiency judgment works:
Let’s say you still owe $200,000 on your home, but you lose your job and can no longer afford to keep up with your payments. Your lender decides to foreclose on your home and it ends up selling for $180,000. In this situation, you would be left with a $20,000 deficiency after the foreclosure. This means your lender can come after you for the $20,000 you owe on the mortgage. You might also have to deal with additional legal fees and costs from the foreclosure.
If you are given a deficiency order by the court, you are legally obligated to payback the lender. If you don’t pay your lender, they can collect the debt through the following means:
- Wage Garnishment: A portion of your paycheck is taken until your debt is repaid
- Levying Accounts: Cash can be taken from your bank accounts to reduce your debt
- Property Lien: Your lender will be given legal interest in items you own
Chicago Deficiency Judgment Attorneys
Have you been issued a deficiency judgement for your debt? Do you need help protecting your rights? At Atlas Consumer Law, we are here to help clients in Chicago resolve their debt disputes. We can take a look at the details of your case and explain all of your options under the law. Our legal team will use our extensive resources to secure a fair case result on your behalf. Let us get started building your legal strategy today.
Call (312) 313-1613 to schedule your free initial consultation with one of our consumer law attorneys. Don’t hesitate, give our legal professionals a call today to get help resolving your debts.