What is a deficiency judgment?

A deficiency judgment is a type of civil court judgment issued in Texas when the proceeds from a foreclosure sale are not enough to pay off the mortgage loan. Foreclosure is the legal process of taking possession of and selling a property to recover the debt owed on it. In some cases, the amount the lender recovers from the foreclosure sale might not be enough to pay the total amount of the loan. In this case, the court may issue a deficiency judgment against the borrower to cover the remaining balance. The borrower is then responsible for paying the deficiency amount within a certain amount of time, usually six months. If they fail to do so, the lender can pursue additional collection efforts, such as wage garnishment or the filing of a lien on the borrower’s other property. The deficiency judgment can also affect the borrower’s credit score, making it more difficult for them to qualify for future loans. In Texas, deficiency judgments are rare, as lenders usually prefer to take possession of and sell the property rather than going to court. However, if a deficiency judgment is issued, the borrower has the right to appeal, and they may be able to have the deficiency amount reduced or even dismissed.

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What is a deficiency judgment?

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