A forced sale in a home foreclosure can result in a deficiency judgment which can be levied against the foreclosed homeowner
A deficiency judgment acts as a court order allowing the creditor to recover the difference between what the debtor still owes the mortgage creditor should the sale of the collateralized property fall short of the remaining debt owed to the creditor.
The measure of damages resulting from a deficiency judgment is the difference between what the homeowner still owes on the home loan and the final amount recovered from the sale of the home by the mortgage creditor. The creditor can go into court and convert the deficiency amount into a money judgment in favor of the creditor and against the foreclosed homeowner.
A deficiency judgment entitles the creditor to collect the amount of the deficiency by other means of collection, such as placing a lien on other properties owned by the debtor, attaching bank accounts, and garnishing wages.
A Deficiency judgment does not just apply to home foreclosures. A deficiency judgment entitles the creditor to collect the balance of any secured debt remaining after the sale of the collateral, which could be a boat, vehicle, or any personal property of value.
