What is a deficiency judgment in a foreclosure?

A deficiency judgment in a foreclosure is a legal judgment by a court forcing the borrower to pay any remaining balance to the lender after a foreclosure sale. This occurs when a property is sold for an amount that does not cover the full amount of the debt that was taken out by the borrower when buying the property. In Wisconsin, deficiency judgments can be obtained as long as the lender meets the requirements under § 846.18 of the Wisconsin Statutes. For a lender to receive a deficiency judgment, they must show the court that the fair market value of the property was less than the amount owed on the loan. The court will then order the borrower to pay the remaining balance on the loan. This amount is sometimes paid by the borrower in one lump sum, or in monthly installments. In Wisconsin, deficiency judgments are limited by statute. This means that the amount that the court can order as a deficiency judgment cannot exceed the difference between the amount of the loan and the fair market value of the property, and cannot include court costs, attorney fees, or related charges. Lenders are also limited to the time in which they can pursue a deficiency judgment, which is generally six years. In summary, a deficiency judgment in a foreclosure is an order from the court requiring the borrower to pay the balance of the loan due to the lender after a foreclosure sale. This amount is limited by Wisconsin statute, and the lender has a limited amount of time in which they can seek a deficiency judgment.

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