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Deficiency Judgment Risks
2 min readLast reviewed
After a foreclosure, some owners are surprised to learn they can still owe money through a deficiency judgment. This article explains that risk in plain language. It is general information, not legal advice.
What a deficiency judgment is
A deficiency judgment is a court order for the remaining debt when a foreclosure sale does not cover the full balance owed. It means the debt may follow you after the timeshare is gone.
Whether one is available depends on your loan, the foreclosure type, and state law.
When the risk arises
A deficiency is more likely when:
- A loan default leads to foreclosure
- The foreclosure sale recovers less than the balance
- State law and the loan permit a deficiency claim
- The debt is pursued rather than written off
How to reduce the risk
The most reliable way to avoid a deficiency is to avoid foreclosure. Explore payoff, modification, or a legitimate exit first.
If foreclosure is already underway, a qualified attorney can explain your state's deficiency rules.
Key takeaways
Keep these in mind:
- A deficiency judgment can survive the loss of the timeshare.
- Availability depends on the loan, foreclosure type, and state law.
- Avoiding foreclosure is the best way to avoid a deficiency.
- Seek legal advice if foreclosure is threatened.
Sources & citations
- 1.FTC — Timeshares and Vacation Plans— Federal Trade Commission
- 2.CFPB — Consumer resources— Consumer Financial Protection Bureau
Written by
Consumer Education Desk
Timeshare Research & Reporting
Reviewed by
Compliance Reviewer
Consumer-Protection & Compliance Review
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