We just read a very interesting article in the Wall Street Journal on home foreclosures and the possibility of deficiency judgments. Many people think that if their house is foreclosed on by a financial institution, that is the end of the matter and they can walk away without worrying about any further obligation. In some state's that's the case. In Georgia, however, it is certainly not the case. In Georgia, if your home is foreclosed and you owe more on the mortgage than the house sells for, you could very well owe that sum of money to the bank. For example, if you owe $150,000.00 on the loan and the home is foreclosed and sold for $100,000.00, then you would owe the bank $50,000.00.
As bankruptcy attorneys, we handle this issue routinely. Deficiency judgments are common and, according to the Wall Street Journal article, becoming increasingly so. The good news is that this debt (a deficiency judgment) can be discharged (eliminated) in bankruptcy. If you find yourself facing this problem, please call us immediately to discuss how we can help you.