Deficiency judgments allow lenders to pursue borrowers in default for deficiencies after the sale of the collateral. For those in Massachusetts facing deficiency judgments, Massachusetts laws allow deficiency judgments in cases of foreclosures of property and liens as well as defaulted credit transactions. However, courts only allow judgments upon proper notice. For example, a mortgage holder is required to provide a written notice to the defendant with a warning about the deficiency no later than 21 days before the sale date.
Current Laws
Chapter 183B: Section 44. Release of liens; surety bond; service of process for foreclosure of lien
(c) If a lien is to be foreclosed or enforced against all time-shares in a time-share property, service of process shall be made upon the managing entity, if any, and shall constitute service thereof upon all the time-share owners for the purposes of foreclosure or enforcement. The managing entity shall forward promptly, by registered mail, a copy thereof to each time-share owner at his last address known to the managing entity. The cost of said forwarding shall be paid in advance by the holder of the lien and may be taxed as a cost of the enforcement proceeding. Said notice shall not be sufficient for the entry of a deficiency or other personal judgment against any time-share owner.
Chapter 244: Section 17B. Notice of intention to foreclose (deficiency)
Section 17B. No action for a deficiency shall be brought after June thirtieth, nineteen hundred and forty-six by the holder of a mortgage note or other obligation secured by mortgage of real estate after a foreclosure sale by him taking place after January first, nineteen hundred and forty-six unless a notice in writing of the mortgagee’s intention to foreclose the mortgage has been mailed, postage prepaid, by registered mail with return receipt requested, to the defendant sought to be charged with the deficiency at his last address then known to the mortgagee, together with a warning of liability for the deficiency, in substantially the form below, not less than twenty-one days before the date of the sale under the power in the mortgage, and an affidavit has been signed and sworn to, within thirty days after the foreclosure sale, of the mailing of such notice. A notice mailed as aforesaid shall be a sufficient notice, and such an affidavit made within the time specified shall be prima facie evidence in such action of the mailing of such notice.
Chapter 255: Section 13I. Default under consumer credit transactions; enforcement; notice; curing of default; deficiency judgment
(d) No court shall enter a deficiency judgment against a debtor which includes a finance charge or insurance premiums allocable to instalments due after repossession. A debtor whose goods have been repossessed shall not be liable in a civil action for a deficiency unless the secured party files an affidavit signed either by the purchaser at the sale or by the secured party stating the price for which the goods were sold and the date and place of sale. Such affidavit shall be filed with the complaint.
Talk with an Attorney
If you are facing a deficiency judgment in Massachusetts, lenders such as credit card companies can only come after you if you signed an affidavit at the time of sale of the collateral. Even so, the plaintiff must give you proper notice regarding date and place of the sale. Talk with an experienced attorney to discuss the details of your case.
