A deficiency judgment is a court order that mandates the borrower to pay the outstanding balance on a loan when the collateral or security for that loan does not entirely cover the defaulted debt.
Judicial foreclosure is a legal process in which a defaulted debtor’s property is sold under the supervision and ratification of a court, often resulting in a deficiency judgment against the debtor if the sale price does not cover the owed amount.
Personal liability refers to an individual’s legal responsibility for a debt. In most mortgage loans on real estate, personal liability means that the borrower is accountable not only for the property but also for the repayment of the debt itself. Distinguishing it from nonrecourse loans and enhanced by additional clauses like the exculpatory clause, this concept is critical in financial and real estate transactions.
Strategic default is the intentional cessation of payments on a debt despite having the financial means to fulfill the obligation, typically done for perceived financial benefits.
