Collector Trying to Collect Deficiency After Foreclosure

Feb 02, 2011

Collector Trying to Collect Deficiency After Forclosure
by: Debtcollectionanswers.com

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The collector is demanding that you pay the deficiency on your loan -- the difference between what you owed on it when your home was foreclosed on and the amount that the bank was able to get for your home when it was sold. If you do not pay the amount of the deficiency, the collector or the bank, depending on who now owns the debt, may decide to sue you for the money. If it wins the lawsuit, it will ask the court for permission to do one or more of the following: seize funds in your bank account, garnish your wages, put a lien one or more of any nonexempt assets you may own, or seize one or more of your nonexempt assets. (Nonexempt assets are assets that creditors can take; exempt assets are protected from creditors. Each state determines which assets are exempt or nonexempt.)

Whether or not you get sued will depend on the collector's (or bank's) assessment of how likely it is that it will be able to collect the deficiency judgment if it wins the lawsuit. If you and your wife are both unemployed, if you have very little money in your bank accounts, and if you own few if any nonexempt assets, you may not be sued. However, the collector (or bank) may decide to go ahead with the lawsuit anyway, gambling that your financial situation will improve soon at which point it might be able to collect on its judgment.

I recommend that you schedule a meeting with a consumer law attorney in your area who helps consumers resolve debt collection problems. The attorney will want to review all of the paperwork associated with the foreclosure of your home and all communications you may have received from the debt collector related to the loan deficiency in order to ensure that everything was done properly. If it was not, that will work to your benefit. Also, the attorney will take a look at your current financial situation and advise you about your best course of action. One option may be to file for consumer bankruptcy.

By the way, most consumer law attorneys will not charge for an initial appointment, but you should confirm that is the case when you call to schedule a meeting.

Let us know how you resolve your situation. Your feedback will be useful to others with your same problem.

Collector Trying to Collect Deficiency After Foreclosure

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Collector Trying to Collect Deficiency After Foreclosure