Pennsylvania Deficiency Judgement Defense Lawyer

Pennsylvania Deficiency Judgement Defense Lawyer

If you are a home owner in Pennsylvania and have been informed about an impending home foreclosure, you may also have become aware of what is known as a deficiency judgement. Unfortunately, the foreclosure of one’s home is the step in a series of actions mortgage holders can take to recover their losses. Creditors may also pursue what is known as a deficiency judgement after foreclosure to fully cover their losses. This practice is not prohibited by state or federal law and can further exacerbate the excess debt that created the financial problems at the start. Essentially, the foreclosure judgement can work to ensure that the individual stays in debt for a significantly longer amount of time.

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What Is a Deficiency Judgement after Foreclosure?

After a lender has foreclosed on a home, he or she may realize that the price paid at the foreclosure sale does not fully cover the amount of money the lender is owed. To avoid losing money on the transaction, the lender may decide to seek the difference between the amount of the debt owed and the sale price of the home. This amount of this difference is the deficiency judgement amount. A deficiency judgment results in additional debt and often further exacerbate the circumstances that caused the financial difficulties.

When Is a Deficiency Judgement Granted by a Pennsylvania Court?

Pennsylvania law does not prohibit deficiency judgments. As its name suggests, a deficiency judgement after foreclose is only granted following the close of the foreclosure process. Furthermore, a deficiency must exist for a judgment to be granted.

A deficiency judgement must be brought as a separate action that is not part of the foreclosure proceedings. Furthermore, the timing of the action matters since 42 Pa. Con. St. Ann. § 5522[b][2] requires all actions for a deficiency judgement to be brought within six months. Other conditions and laws apply to constrain a lender’s approach to deficiency judgements. For instance, when the lender is the purchaser at the foreclosure sale, then the maximum value of the deficiency is limited by the fair market value of the property. 42 Pa. Con. St. Ann. § 8103[a]. However, absent relief, when a senior mortgage holder forecloses, junior mortgages are also generally foreclosed. Both senior and junior mortgage-holders may bring a deficiency judgment action if equity is insufficient to cover the obligation.

Stopping Foreclosure to Protect Your Home and Prevent a Deficiency Judgement

The most effective means of dealing with a deficiency judgement after foreclosure is often to halt the foreclosure itself. By halting the foreclosure, the taxpayer will keep his or her home. For individuals facing debt problems, protecting their family home is often the foremost concern. Thus,  exploring strategies to stop the foreclosure is often a first step.

Pennsylvanians have numerous options to stop a home foreclosure. Bankruptcy through Chapter 13 of the U.S. Bankruptcy Code is one of the ways a homeowner can stop foreclosure and gain additional time to pay back his or her mortgage and other debts that may have fallen into arrears. Additional options exist to stop home foreclosures including state court litigation strategies. However, every foreclosure scenario is unique and you should be sure to consult with an experienced attorney prior to embarking on a course of action.

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Can I Challenge a Deficiency Judgement after Foreclosure?

Generally, it is prudent to address the possibility of a deficiency judgment prior to a foreclosure. For instance, prior to a short sale or other negotiated settlement, the homeowner should obtain written assurances that the lender will not seek a deficiency judgement.

However, there are scenarios where a homeowner may fail to negotiate or obtain these assurances. In this situation, one option a homeowner has is to challenge the basis of the deficiency judgment calculation. One means of pursuing this strategy involves disputing the fair market value assessment. This strategy is often pursued in the Answer to a petition for a deficiency judgement. The individual may wish to raise evidence that the fair market value is overstated through appraisals, sale prices of comparable properties, and other evidence.

Work with Pennsylvania Deficiency Judgement Defense Lawyers

If you have fallen behind on your mortgage and are concerned about foreclosure and deficiency judgments, it is prudent to begin planning as soon as possible. Working with the foreclosure and deficiency judgement defense lawyers of Sadek & Cooper can help you prevent or strategically minimize the consequences of a home foreclosure. To schedule a free and confidential consultation at our bankruptcy law offices, call 215-545-0008. Our Pennsylvania law offices are conveniently located in Center City Philadelphia, northeast Philadelphia, Bucks County, and Delaware County.

 

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Doug Tinlin
Doug Tinlin
06:55 15 Feb 18
Brad Sadek gave me hope when he decided to handle my mortgage for enclosure defense. I had exactly 10 days left of the 30 days ultimatum given me, but he was able to bargain for an extra 30 days for me to pay up. That duration turned out just right.
Jacinth Jacinth
Jacinth Jacinth
16:07 31 Jan 18
Excellent service. Brad and Matt were outstanding and friendly. They helped me through this. I’ve never met attorneys like these. Thank you!
julie njoku
julie njoku
12:29 24 Jan 18
Brad Sadek is excellent!. He understands and he's fair. You feel like you have someone fighting for you. The staff is friendly, professional, and courteous. These guys are the best at what they do !
Owen Black
Owen Black
20:14 09 Jan 18
Thanks for the great service! I would recommend this firm highly. Throughout the years I have been helped by this firm greatly and very much appreciated.
Steven Rychalsky
Steven Rychalsky
15:30 09 Jan 18
Sadek and Cooper law office was a wonderful experience to work with. Bankruptcy is a difficult experience but they helped with the stress so much and made it easy. I would recommend Sadek and copper too anyone.
Chris Kourelias
Chris Kourelias
19:09 28 Dec 17
Working with both Brad & Matthew was a pleasure. Both gentlemen are extremely knowledgeable and helpful in providing me the right assistance needed to make the correct decision to benefit me in the long run. I would recommend both candidates to anyone looking for assistance with a reputable law firm.
Jennyfer Santana
Jennyfer Santana
21:17 21 Dec 17
Highly Recommended. Matt & Brad assisted with my case. I felt comfortable throughout the entire process. Matt was very understanding, patient, and ensured he answered all my questions! Both great guys and very friendly! It was a pleasure working with Matt and Brad.
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