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. Stipulated Judgment

    A court order that requires one party to pay another party a ...
  3. Collection-Proof

    A debtor who doesn’t have any assets that a creditor can collect ...
  4. Charging Order

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

    A written agreement signed by the defendant that accepts the ...
  6. Debtor

    A company or individual who owes money. If the debt is in the ...
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. Investing

    Equity Stripping Leaves Creditors Empty-Handed

    Add additional debt to your real estate assets to keep the creditors at bay.
  6. 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.
  7. Taxes

    Changing The Face Of Bankruptcy

    A 2005 law attempts to unmask fraudulent debtors and still save those who are struggling. Will it affect you?
  8. 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.
  9. Investing

    Attention Home Buyers: Why You Need a Lawyer

    Property transactions are complex and subject to specific state/local rules. Hiring a lawyer can simplify the process.
RELATED FAQS
  1. 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 >>
  2. What effect did the Bankruptcy Abuse Prevention and Consumer Protection Act of 2 ...

    Credit card companies and banks hate deadbeats who take from their bottom lines. They especially dislike the Chapter 7 bankruptcy ... 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