Deficiency Laws in Florida

As discussed in my previous blogs, deficiency judgments in Florida are a very real concern that should not be taken lightly. Many homeowners are ill informed and believe that if they walk away from their home and give it up in foreclosure, then that’s the end of the problem. Unfortunately, they would be sorely mistaken as it could just be the start of their troubles.

In this blog, I will discuss some of the basic laws that pertain to deficiency judgments in Florida.

First, the granting of a deficiency judgment is determined on a case by case basis. Florida Statute 702.06 states that, “the entry of a deficiency decree for any portion of a deficiency, should one exist, shall be within the sound judicial discretion of the court…” This means at the end of the day, it is up to the judge as to whether that demand should be granted, denied, or reduced. However, upon the filing of an affidavit of damages, without opposition, a deficiency judgment will likely be granted.

Next, if a lender is successful in obtaining a deficiency judgment against you, it will be recorded in the public records for up to twenty years. Unless the debt is paid, the lender can garnish your wages, bank accounts, and even collect against your estate after you die.

Also, there are no set instances where a deficiency judgment is automatic. Whether or not one is pursued is an option exercised by the Lender. The size of the debt and which lender is involved will give you a fairly clear indication of the likelihood that a deficiency judgment may be sought. Florida law permits lenders to seek deficiency judgments at the commencement of the foreclosure suit by including the demand for judgment in the lawsuit, or by preserving their right to do so at a later date.

Florida Statute 702.06 further allows the lender to file a civil action after the fact to recover the deficiency so long as there was no judgment, for the complaining lender, previously entered in conjunction with the foreclosure. This is often referred to as “double-dipping.” However, this prohibition against double-dipping does not prevent a second or third mortgage holder from filing a separate complaint for a deficiency judgment in an attempt to recover at least a portion of the money owed to the lender.

Lastly, Florida Statute 95.11, known as the statute of limitations, states that demands for a deficiency judgment must be made within five years of the determination of the deficiency. This leaves the homeowner with a cloud of uncertainty hanging over their financial well-being for half a decade. It is worth repeating, that once there is a deficiency judgment entered against the borrower, once recorded in public records, that judgment will remain for 20 years!!!

The moral of today’s blog is that deficiency judgments are very real concerns; by not handling them correctly, they could turn a bad situation even worse. If you or someone you know is falling behind on their mortgage payments or facing a foreclosure in Southwest Florida, you should speak to a licensed Florida Attorney.

This is a generalized discussion on deficiency judgments in Florida and is not intended for any particular set of facts. By no means does this blog create an attorney-client relationship or privilege between the Attorney and the readers.

If you would like schedule a free consultation, or have any questions, comments, or suggestions on upcoming topics, please comment below or email GuirguisLaw@gmail.com.

VERNON W. GUIRGUIS, ESQ.
The Guirguis Law Firm, PLLC
1423 S.E. 16^th Place, STE 204
Cape Coral, Florida 33990
239.573.9939 Telephone
239.603.9939 Facsimile