DEFINITION of 'Deficiency Judgment'

A judgment made by a court against a debtor indicating that the sale on a foreclosed piece of property did not cover the outstanding mortgage in full. It is a lien placed on the debtor for further money. A deficiency judgment is not considered by the court unless the lender makes a motion for it to be granted. If the lender does not make the motion, then the court considers the money gained from the foreclosed property to be sufficient.

BREAKING DOWN 'Deficiency Judgment'

A debtor who receives a deficiency judgment may seek exemption from the lender or other creditors, file a motion to have the judgment overturned or, if necessary, declare bankruptcy. Before making any decisions pertaining to a deficiancy judgment, defendants would be best advised to contact an attorney.

RELATED TERMS
  1. Judgment Lien

    A court ruling that gives a creditor the right to take possession ...
  2. Judgment

    A court order to the loser of a lawsuit to pay the winner a specified ...
  3. Charging Order

    A court-authorized right granted to a judgment creditor to attach ...
  4. Confession Of Judgment

    A written agreement signed by the defendant that accepts the ...
  5. Judgment Proof

    Someone who doesn’t have enough assets for a creditor to seize ...
  6. Deficiency Balance

    The amount owed to a creditor if the sale proceeds from the collateral ...
Related Articles
  1. Taxes

    What's a Debtor?

    A debtor​ is an individual or company that owes money.
  2. Taxes

    Tax Court: Your Last Resort

    Appealing an unfavorable or unfair tax ruling may be your last chance to save your finances.
  3. Investing

    Pros and Cons of Buying a Foreclosed Home

    What are the benefits and drawbacks of purchasing a foreclosed home?
  4. Investing

    How Does a Lien Work?

    A lien gives a creditor the legal right to seize and sell property, then use the proceeds to pay off a borrower’s debt.
  5. Insights

    Chevron's Rainforest Controversy Continues (CVX)

    A mediagenic conflict between Ecuadorian activists on the one hand and the oil giant Chevron on the other continues to capture the public imagination.
  6. Taxes

    Investing In Property Tax Liens

    Property tax liens can be a viable investment alternative for experienced investors that are familiar with the real estate market.
  7. Financial Advisor

    Why Bad Credit Is Bad For Financial Careers

    In order to obtain and maintain a career in the financial industry, it is also important to have a clean credit report.
  8. Investing

    5 Ways To Buy A Foreclosed Home

    There is no shortage of foreclosure properties. Find out how you can buy one for yourself.
  9. Taxes

    5 Myths About Personal Bankruptcy

    There are some persistent myths that hover over the process of bankruptcy that are either half-truths or completely false.
  10. Personal Finance

    Tips for Choosing the Best Online Mortgage Lender

    Finding the right online mortgage lender can be a tall task. Here's some help on how to avoid wasting your time.
RELATED FAQS
  1. How do debt collection agencies make money?

    Find out how a collection agency makes money, what rules it is bound by, and when it can take a pay check or garnish a bank ... Read Answer >>
  2. What types of liens are seen as good and which are bad for my credit?

    Understand what a lien is and what types of liens are most common for individuals, and learn which types of liens are good ... Read Answer >>
  3. Are qualified retirement plans protected from creditors?

    Learn how to protect your retirement assets from creditors. Certain provisions provide for exemption of retirement assets ... Read Answer >>
  4. Can a creditor sue me for a delinquent account?

    Learn what happens when an account is delinquent and read about the regulations that protect consumers who have delinquent ... Read Answer >>
Trading Center