What is a deficiency judgment?

A deficiency judgment is a court order granted to a creditor when the proceeds from a foreclosure sale are insufficient to cover the outstanding debt owed by the debtor. In Florida, deficiency judgments are governed by the Florida Deficiency Judgment Act. When a debtor fails to make timely payments on a loan, the creditor will file for foreclosure. After the foreclosure, the proceeds from the sale of the debtor’s property are used to pay off the outstanding debt. If the proceeds are not enough to cover the full amount of the debt, the creditor can request a deficiency judgment from the court. In Florida, a deficiency judgment must be requested within five years of the date of the foreclosure sale. The creditor can then collect the remaining amount due from the debtor, typically by garnishing the debtor’s wages or seizing assets. Depending on the specific situation, the creditor may choose to not pursue the remaining debt. When dealing with deficiency judgments, it is important to understand Florida debtor and creditor law in order to protect your rights. If you are facing a potential deficiency judgment, it is best to consult with an experienced attorney who is familiar with Florida law.

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