What is a deficiency judgment?

A deficiency judgment is a court order that is issued when a debtor owes more money to a creditor than what can be recovered through the sale of a debtor’s property. For example, if a debtor’s property is used to pay off a loan, the sale may not cover the full amount of the debt, leaving the debtor with an unpaid balance. A deficiency judgment allows the creditor to recover the remaining balance from the debtor. In California, a court can issue a deficiency judgment if the value of the property sold is less than the amount owed. The judgment allows the creditor to collect the amount owed from the debtor through a levy on their wages or bank accounts, or a lien on their property. The creditor has the option to pursue legal action in court if the debtor does not pay the amount owed. It is important to note that in some cases, a creditor may not be able to recover the full amount of the debt. In California, if a loan is secured by a debtor’s home, a creditor may not be able to recover the full amount of the debt, even if they obtain a deficiency judgment. This is because California has laws that limit how much a creditor may recover from a debtor in these cases.

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