Georgia Deficiency Judgment Law

Foreclosures in Georgia can be conducted both judicially and non-judicially.  Non-judicial foreclosure is the most common type of foreclosure in Georgia.  A deficiency is created when a lender forecloses on a property and receives less than what was owed on the property.  A deficiency judgment is created when a lender sues and gets a judgment on the amount still owed on the loan after the foreclosure.  Georgia has the following restrictions on obtaining a deficiency judgment:

  • If a foreclosure occurs non-judicially and the lender would like to obtain a deficiency judgment, it must report the sale to the Court within 30 days after the sale for an Order of confirmation and approval of the sale;
  • The court shall require evidence to show the market value of the property and shall not confirm the sale unless it is satisfied that the property was sold for its true market value; 
  • The Court shall give the debtor notice of the hearing at least five days prior to the hearing (Georgia Code Ann. Section 44-14-161).

Regarding the next-to-last bullet point, in a situation where $100,000 was owed on the property when foreclosed upon, the property sold at foreclosure for $70,000, and the property was actually worth $90,000, the Court may not confirm the sale because it was not sold for its true market value.  But the Court may order a resale of the property if good cause is shown.

What the fair market value of a property is can be difficult to determine and the homeowner and the mortgage company will likely disagree as to that value.  If you live in Georgia and have questions about whether your particular situation might give rise to a deficiency judgment, speak to an attorney in your area for specific guidance.  Or continue searching this site for potential foreclosure alternatives

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