If you lost your home due to a foreclosure or a short sale, and you did not pay the difference, you may have a mortgage deficiency and believe me, it’s not good. The deficiency is the amount your home sold for less what you owed the bank. Sometimes, you may be obligated to pay the deficiency amount even though you don’t live in the house. The bank can obtain a foreclosure deficiency judgment against you if the house goes through foreclosure. Some states allow all legal fees and other fees to be attached to the deficiency amount. Before the lender can go after you for the deficiency, they must obtain a foreclosure deficiency judgment.

Once they get the Foreclosure deficiency judgment, they can garnish your wages, freeze your bank account and seize personal accounts. If your state allows the lenders to come after the deficiency amount, the banks will use all resources to get their money. If the lender is allowed to collect the deficiency amount, you have a few options to assist you with this matter.

Bankruptcy is one option, but you may not be able to get the debt vacated because you have income coming in, and you may not be eligible for Chapter seven. Furthermore, you must hire an attorney to file your BK papers and this could cost you. Further, your credit report and score will be destroyed. Foreclosure deficiency judgment marks will stay on your credit report for seven years, but a BK will stay on your report for 10 years.

Looking to get a new start after the foreclosure deficiency judgment, it’s better to just take the foreclosure hit on your credit report than filing for BK. Another option would be to try to offer a settlement on the foreclosure deficiency judgment. You can also seek out an attorney or a firm who is experienced in dealing with foreclosure deficiency judgments.

Trying to negotiate this huge amount on your own could be the wrong thing to do because you don’t have the skills or the know how. In my opinion, it’s best not to ignore a foreclosure deficiency judgment because it could have a serious effect on your financial life. If you don’t take care of this matter, a lien could be placed on your assets.

If you have a foreclosure deficiency due to a short sale or other reasons, you must implement all options to avoid it from going to court. The smart way to fight this problem is action and education. Make sure you use a firm with a track record of negotiating good settlements for penny’s on the dollar.

Mark Clayborne is a Certified Credit Consultant with ten years of experience assisting consumers with credit issues. If you liked this article, then please sign up to read the first chapter of The Credit Repair Book and get a Free Restore your Credit E-class at http://www.hiddencreditrepairsecrets.com This article may be freely reprinted or distributed in its entirety in any Ezine, newsletter, blog, or website. The author’s name, bio and website links must remain intact and be included with every reproduction.