Foreclosure and Deficiency Judgment Resulting from Failure to Keep Up with Chapter 13 Bankruptcy Payments

Question: We had been in Chapter 13 Bankruptcy for a couple of years. Due to my disability, we were not able to keep up with the Chapter 13 Bankruptcy payments and were discharged from it. We are now trying to deal directly with our mortgage company to save our home from foreclosure. If we cannot come up with a deal and our home goes to a foreclosure action sale for less than what we owe, will the mortgage company come after us for the difference?

Response: Different banks have different policies on pursuing deficiency judgments. Lawfully, they have the right to go after you for the difference, i.e., deficiency. Many banks today, however, waive their right to sue borrowers for deficiency because they know many people have no assets to go after and it is not economically feasible for the bank to do so. If you feel that you may near foreclosure sale, discuss the short sale or deed-in-lieu options with the bank to avoid financial ramifications that could result from foreclosure action sale.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
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