What is a “deficiency claim”?

A deficiency claim is a legal claim that a creditor makes when a piece of property that was used as collateral, such as a car or other asset, is sold in a foreclosure or repossession. The creditor claims that the proceeds from the sale of the collateral did not cover the full amount of the debt. In Florida, a creditor has the right to make a deficiency claim if the amount of money that was received from the sale of the collateral is less than the amount of the debt. To make a deficiency claim, the creditor must follow a few steps. First, the creditor must give the debtor written notice of the claim. This notice must be sent to the debtor’s last known address and must include the amount of the debt, the amount of the deficiency, and the creditor’s name and address. The creditor must also file a lawsuit in court to collect the deficiency amount. The creditor must then serve the debtor with the court documents and wait for the debtor to respond. In the lawsuit, the debtor can argue that the amount of the deficiency is wrong or that they should not have to pay it. The court then decides what, if any, amount the debtor must pay. If the court decides that the creditor was entitled to a deficiency, then the court will decide how much the debtor must pay and how it will be paid. These amounts can be set up over time or paid in lump sums. If the debtor does not make the payments, the creditor may be able to garnish their wages or take other action to collect the debt.

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What is a “deficiency claim”?

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