New Jersey Deficiency Judgment Law

Foreclosures in New Jersey are conducted almost exclusively by judicial foreclosure.  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.  New Jersey has the following restrictions on obtaining a deficiency judgment:

  • No deficiency judgment can be granted in a judicial foreclosure action;
  • After a foreclosure, a lender may bring an action for a deficiency on the remaining balance owed under the Note; 
  • Judgment may be rendered on the balance due on the debt and interest and costs of the action; and
  • The lawsuit pursuing a deficiency judgment must be brought within 3 months of the foreclosure sale (or three months from confirmation, if confirmation is required. (New Jersey Statutes Annotated Section 2A:50-1).

If you live in New Jersey 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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