If you are about to lose your home to a foreclosure, you may want to talk to a real estate lawyer to find out what your options are. If you cannot find a way to save your home, your attorney may be able to help you avoid owing money on this home after the foreclosure occurs. Here are several things to understand about the money you may owe if your lender forecloses on your home.
The Definition Of A Deficiency Judgment
A deficiency judgment is something a lender can use to come after you for money after a foreclosure. The deficiency the lender may come after you for is the difference between the amount you owed on your house and the amount they sold it for.
For example, if you owed $160,000 on your home and the lender sold it for $120,000, there is a deficiency of $40,000. This amount is what the lender lost by having to take your home from you and sell it to someone else.
State Rules On Deficiency Judgments
Some states allow deficiency judgments, while others do not. Your attorney will be able to tell you how your state views these. If your state does not allow these, you will not be legally obligated to pay the deficiency to your lender. If your state does allow them, you could be legally responsible to repay this money.
Ways To Get Out Of Paying This
If your state allows lenders to use deficiency judgments, the best thing you can do is have your attorney work out an agreement with the lender before the foreclosure occurs. Your lender might agree to waive the deficiency against you; however, this must be in writing before the foreclosure actually finalizes. If you can get this in writing, you will not have to worry about this.
If your lender will not agree to this, there is not a lot you can do to prevent them from coming after you. You can, however, file for bankruptcy after the lender places the judgment. Filing for Chapter 7 bankruptcy will erase this debt, and the lender will never be able to legally come after you for it.
Facing foreclosure is never a good experience, but you can be even worse off if you are stuck owing money after you lose your home. To learn more about your options, contact a real estate attorney from a company like the Blake Law Office today.