It’s true that a short sale can be a satisfactory way to avoid a foreclosure when a homeowner is unable to meet payments. However, in the state of Florida it does not mean that the debtor is completely out of the woods. Lenders in Florida can sue for a deficiency judgment following a short sale, which could leave the borrower liable for debt once again.
About Deficiency Judgements
Before one can determine if there is a defense against a deficiency judgement, it is important to know what exactly these suits are. To put it simply, the deficiency is the difference between the price the home was sold for and the amount still remaining on the mortgage. Lenders in Florida can file a lawsuit to compel the debtor to pay the deficiency, whether following a short sale, a foreclosure sale, or even a deed in lieu of foreclosure. Since borrowers in this position are usually unable to supply the funds needed to satisfy these debts, the lender may garnish his or her wages, levy bank accounts, and even seek out liens on other personal property.
Potential Defenses to Explore
The best way to avoid a deficiency judgement is to enlist a skilled Miami foreclosure defense attorney from the onset of the foreclosure process, who can secure an agreement that prohibits the lender from seeking one later. Of course, this is not always the case. Thus, knowing what defenses may be available is always advantageous.
The most simple defense to a deficiency judgement will lie in the timeframe for which it was sought. As of July 2013, banks only have a one-year period to pursue a deficiency judgement after the home’s sale has concluded. If more than a year has passed, a defense attorney can help the borrower demonstrate this to the court. If this isn’t the case, an attorney can compel the lender to produce documentation showing the debt is valid. If such documentation is not provided, the deficiency judgement will be dismissed. If none of these defenses apply, the borrower may consider filing for bankruptcy if he or she qualifies. Depending on the chapter filed, this may either lead to a discharge of the full sum or a favorable repayment plan. Finally, other settlements or repayment plans may be able to be negotiated with the right representation.
Determining how to best respond to a deficiency claim against you will require a full understanding of your case. To get legal guidance from a Miami foreclosure defense attorney at Graham Legal, schedule a free consultation today.