What is Deficiency Litigation?


After a lender forecloses a lien on a real property, oftentimes there will be a “deficiency.” If the proceeds of the sale are insufficient to satisfy the outstanding debt on the property, “deficiency” refers to the amount of debt remaining for which the borrower may still be personally liable. The amount of the deficiency is generally the difference between the proceeds paid to the lender (creditor) and the remaining amount of the debt.

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