After Foreclosure In Arizona, Can My Lender Come After Me For Any Deficit?

By Author: Cyontz
Total Articles: 4
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That will depend on the type of loan you as homeowner had/have. If the loan was utilized to acquire the home, then your loan is known as a non-recourse loan, and the homeowner doesn't have any personal liability for it, unless there's substantial damage to the home.

Typically, if the loan was not used to purchase or increase the value of the home (such as a HELOC) the financial institution can file a suit against the homeowner to collect on the loan. To illustrate, if the homeowner bought the property, and then borrowed $100,000 under a HELOC, that lender can file a suit in court to collect for the promissory note.

Would bankruptcy benefit me if I am responsible for the deficit?

Dependent upon the homeowner's financial circumstances, and depending on the chapter, declaring bankruptcy can eliminate, or reorganize this kind of debt (unsecured debt, once the property is foreclosed). It is common for the property owner who has/had a considerable outstanding balance on a HELOC to file for bankruptcy when they have realized that foreclosure is more than likely unavoidable, or that foreclosure is the better decision ...
... to make in their situation.

The homeowner should be aware that deficit statutes, or anti-deficit statutes vary in every state. For that reason, if the owner of a house is thinking of declaring bankruptcy after foreclosure, or in anticipation of foreclosure, the owner should always seek the counsel of an experienced Arizona bankruptcy attorney (or a bankruptcy attorney in whichever state you're in) to learn how bankruptcy might impact them.

Please be aware that any information here or on these websites is for educational purposes only and is not intended to be legal advice. If you need legal advice, please contact an attorney, or contact the Yontz Law Group, P.C. for a free consultation with a bankruptcy attorney in Mesa, Gilbert, Apache Junction, Phoenix, or throughout the state of Arizona.