A deficiency judgment is a balance owed on a debt that wasn’t covered by what was purchased on that debt. If the house is foreclosed, it could be worth much less than the loan taken out on the property and the borrower could be subject to a deficiency judgment on the difference. We’re seeing a lot of cases coming in where the deficiency is being pursued by debt collectors who are purchasing these debts from the original creditors. It’s important to know that there’s a statute of limitations on when they can pursue deficiency judgments and it’s different for residential property and any other deficiency in the state. For most deficiency judgments, they have 5 years to pursue them. In residential, they have 1 year from date of foreclosure sale or July 1, 2014, whichever comes later.
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Frequently Asked Questions
What is a deficiency judgment?
A deficiency judgment is a balance owed on a debt that wasn't fully covered by the sale of the property that secured it. For example, if a house is foreclosed and sells for less than the loan amount, the borrower could be subject to a deficiency judgment for the difference.
How long do creditors have to pursue a deficiency judgment in Florida?
For most deficiency judgments, creditors have 5 years to pursue them. For residential property, they have 1 year from the date of the foreclosure sale or July 1, 2014, whichever comes later.
Are deficiency judgments being pursued by debt buyers?
Yes. We're seeing a lot of cases where debt collectors are purchasing these debts from original creditors and pursuing deficiency judgments. It's important to know your rights and the statute of limitations that applies to your situation.
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