What is a deficiency judgment?

A deficiency judgment in Oklahoma is a court order requiring someone who has defaulted on a home loan to pay the difference between the amount owed on the loan and the amount of money generated from a foreclosure sale of the home. It is an unsecured debt, which means that the lender does not have a secured interest in any of the borrower’s property. For example, if a borrower takes out a loan for $200,000 but is unable to make their payments, the lender can file for a foreclosure and sell the home. If the home sells for $180,000, then the lender can seek a deficiency judgment for the remaining $20,000 owed. The lender may also choose to forgive the remaining debt and this is known as a waiver of the deficiency. The borrower should check with the lender to see if this is a possible option. In Oklahoma, the lender is allowed to seek a deficiency judgment within three months of a foreclosure sale. The judgment will then be recorded in the county clerk’s office. The borrower then has six months to either pay the balance of the judgment or challenge it. If the borrower does not pay the judgment, the lender can then start to pursue collection actions, such as garnishment of wages or liens on other property. Failing to pay a deficiency judgment can have serious consequences, so it’s important to work with the lender to find a solution that works for both parties.

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What is a deficiency judgment?

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