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A deficiency judgment occurs when property is foreclosed upon by the bank and the price they receive at the sale is not enough to cover what a debtor owes on the property. For example, if a property is worth 240,000 and it is sold at a foreclosure sale for $210,000 the difference of $30,000 is the deficiency. There are certain guidelines that cover when a deficiency judgments are allowed in Georgia.
Deficiency Judgment in Georgia
Georgia is a notice foreclosure state. This means that a mortgage company does not have to sue you in court to foreclose upon your property. They simply must follow the statutory requirements of sending notice via certified mail of the intent to foreclose on the property and then publishing notice in the required county legal organ for the appropriate number of days. Once proper notice is give, the real property can literally be sold on the courthouse steps.
In order for a lender to obtain a deficiency judgment, within 30 days of the sale, bring an action in the Superior court of the county the property is located in to confirm the sale. The sale will not be confirmed if the mortgage company can’t establish that the price the property sold on the courthouse steps is the true market price. The debtor will be able to attend the hearing and bring in any relevant information regarding the notice and sale procedures as well. Hearings are usually held within 5 days of the mortgage company’s application for confirmation. This law is to protect consumers from unscrupulous banks, which sell the property for well below fair market value and then seek to collect the rest from the debtor.
Seeking Legal Help
When dealing with a mortgage company, especially if your home is in foreclosure, it is imperative that you seek the advice and counsel of an attorney licensed to practice law in Georgia. Losing your home is traumatic enough; to also owe additional debt on your home is like adding insult to injury. Not all mortgage companies will seek to collect a deficiency judgments, but if they do, be prepared and have an attorney by your side.
