How To Defend Against and Eliminate Deficiency Judgments

Notice of ForeclosureBy Omar J. Arcia, Esq.
Foreclosure Defense and Bankruptcy Protection Attorney


         The most recent increasing trend in cases coming into our office are “deficiency judgment” actions brought against homeowners AFTER a foreclosure, short sale or deed in lieu. If you were foreclosed out of your home, completed a short sale or returned your property to the bank through a deed in lieu, the bank may still sue you for the difference between what you owe under the mortgage and the value of the property in question. That is called a deficiency judgment, and if not properly defended, can lead to garnishment of wages, levying of bank accounts and repossession of vehicles. There are several key ways you can defend against or eliminate deficiency judgments altogether.

            The first and most effective way of defending against a deficiency judgment is based upon a recently enacted law in Florida which requires that as of July 1, 2013 a deficiency judgment action be brought within one year of a final judgment, short sale or deed in lieu, instead of the previous law that allowed up to five years to bring a deficiency judgment action. If properly presented in court, the new one year law can be used to stop a deficiency judgment action in its tracks. 

            The second line of defense against a deficiency judgment is to challenge the right of the party bringing the action to collect on the judgment. Lenders often sell the right to a deficiency judgment to collection agencies, but the transfer may be entirely ineffective for failure to comply with legal formalities. If properly challenged, the new “pretender lender” may voluntarily dismiss their deficiency judgment action, and you may even be entitled to recover your attorney’s fees.

            Of course, one sure-fire way to eliminate any deficiency judgment is to file for bankruptcy protection at the first suggestion anyone is attempting to seek a deficiency against you. Once you file a bankruptcy, not only will all legal proceedings stop instantly, but when you receive a discharge in bankruptcy, your mortgage deficiency, all credit card, medical, and all other unsecured debt is forever eliminated.

         Defending a foreclosure, deficiency judgment and filing for bankruptcy are NOT do it yourself propositions. The attorneys at the Arcia Law Firm have more than 40 years combined litigation and trial experience, and we are privileged to successfully represent hundreds of homeowners in our community. We have foreclosure defense, loan modification and bankruptcy departments all in the same office. We will gladly refer you to our satisfied clients so you can be confident in your decision to hire our Firm. If you are struggling to make your monthly mortgage payments, if you are in the middle of a frustrating loan modification process, or if you just received a foreclosure summons, contact the Arcia Law Firm today at 954-437-9066 to schedule a free personal consultation with Omar Arcia, or visit to schedule your appointment online.

Detailed explanations of different options available to homeowners are also discussed in a new DVD developed by the Arcia Law Firm entitled “Fight For Your Home.” If you mention that you heard about the DVD through blog post, you will receive a complimentary copy during your free consultation to discuss your case in detail.

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