Can I Put My Mortgage Deficiency in a Bankruptcy?

Woman checking papers

Question: I got divorced and my ex was supposed to sell the house or refinance it. But that didn't happen. The bank foreclosed on the house. Since I was on the loan the bank now says that I owe them $65,000. The bank said that's the difference between what I owed on the mortgage and what the house sold for in the foreclosure sale. There's no way I can afford to pay that much money. The ex should have done the refi or sold it using Century 21 or Prudential or some other realtor or real estate company. Now I have to get in trouble. Can you get rid of this debt in a bankruptcy?

Answer: Yes, the debt, in this case $65,000.00, can be discharged in a bankruptcy. The difference between what you owe on the mortgage and what the home was sold for is a called the deficiency. Many people file a chapter 7 or chapter 13 bankruptcy to eliminate or discharge a deficiency. With the prevalence of foreclosures in Georgia, filing bankruptcy to address a deficiency is very common. As you state, if a real estate broker/agent was engaged via a company like Century 21, Prudential, Remax, Coldwell Banker, Harry Norman Realtors, or Duffy Realty this situation could possibly have been prevented.

Please call The Sherman Law Group at (678) 712-8561 so that we can answer any questions you may have about a Georgia bankruptcy or debt issue.

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