What is a deficiency judgment?

A deficiency judgment is a legal ruling that grants a creditor the right to collect an unpaid debt from a debtor. Specifically, a deficiency judgment is issued when the value of a debtor’s assets (such as real estate) is not enough to cover what the debtor owes, leaving a “deficiency” balance. A creditor that has secured a deficiency judgment is then usually allowed to collect the remaining debt amount from the debtor. In Hawaii, deficiency judgments are generally governed by Chapter 506 of the Hawaii Revised Statutes. In certain cases, the creditor may also be able to access additional resources like the debtor’s wages and bank accounts. Ultimately, a deficiency judgment is a legal remedy for creditors to recoup the remaining balance of an unpaid debt.

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