How to Avoid Florida Deficiency Judgments by Roy Oppenheim
By Oppenheim Law on Deficiency Judgments, Florida Law, Foreclosure, Real Estate & Roy Oppenheim
Hi, this is foreclosure defense and legal blogger, Roy Oppenheim, once again coming to you “From the Trenches,” doing summer school. Today’s topic is deficiencies and deficiency judgments. Okay, so let’s just lay out the foundation. In the United States, we have what I call a “Divided States of America.” There are certain states like Florida, in New York, and most of the East Coast, where if you borrow money from your bank on your primary residence, or even a secondary residence, and you don’t pay it back, you can be hunted down like a wounded dog for up to 20 years.
There are other states like California, and Arizona, and Nevada, and other parts of the western United States, where if it’s your primary residence and you borrowed money, the same money that you could’ve borrowed in Florida or in New York, and you don’t pay it back, your credit will be dinged. But all the bank can do is foreclose on your house, but they cannot come after you for the difference, that difference is called a deficiency.
Once they go to a court, a judge, and they’re able to register that deficiency as a legal sum that you owe the bank, that deficiency becomes what’s called a deficiency judgment. In Florida, if you have a deficiency and it becomes a deficiency judgment, like I said, the banks can come after you, your estate, your income, your cards, your bank accounts. They can garnish and seize these assets for up to 20 years. Our job as a foreclosure defense attorney, as a real estate attorney and as your attorney, is to do whatever is in our power to make sure that A, you’re not subject to a deficiency, B, that that deficiency does not become a deficiency judgment.
And if it does, how are you going to deal with it so it does not, in any way, affect any of the life cycle events in your life, whether it means getting married, having children, sending your kids to college, having them get married, or Bar Mitzvah, or any other thing, a quince, a sweet 16. We wanna make sure that none of these things are affected by the fact that you have some bank trying to enslave your life, and basically trying to alter the way you live because they’re thinking you made a bad decision when, in fact, it was them and Wall Street who created this entire economy.
So the important thing is to understand the difference between a deficiency and a deficiency judgment, and to make sure that you are not subject to that. How do you make sure that you are not subject to that? And it’s very simple, you make sure that you engage legitimate legal counsel early in the game so that you don’t put your head in the sand, and so you don’t think that anything’s gonna just happen to you. Instead what you wanna do is, you wanna engage your bank, you wanna make sure you know what the rules are, and that you can then use those rules in your favor.
There are lots of different strategies that we have available to ensure that you do not end up being subjected to a deficiency or a deficiency judgment. Just to go over those real quickly, there’s, of course, the short sale, which is very effective. Sometimes doing a modification can help, foreclosure defense, structured foreclosure, deed in lieu of foreclosure, ultimately bankruptcy, or a panoply of any of these options structured in such a way that you make sure that the bank does not come after you.
And even if the bank does come after you, there are ways for you to insulate yourself, to bulletproof yourself, to make sure that you are not hunted down like a wounded dog for 20 years. That is our job, and I’m pleased to say that virtually all our clients to this day who have come to us for strategic default early in the process are not subjecting themselves to deficiencies and deficiency judgments. Because we work as hard and as tirelessly as we can to make sure that you can continue with your life, you can take this burden off your shoulder, and that you don’t feel enslaved to the banks.
Most of our clients, I think, feel a sense of freedom when they have engaged our firm to participate in this process. We welcome your calls, we welcome your inquiries. Again, Roy Oppenheim, “From the Trenches,” doing summer school with you concerning defaults and deficiency judgments. Have a great day.