Deficiency judgment
A court judgment for the remaining balance a borrower still owes after repossessed or foreclosed collateral is sold for less than the debt.
Published May 31, 2026
A deficiency judgment is a court judgment for the amount a borrower still owes after collateral securing a loan is sold for less than the outstanding balance. If a repossessed manufactured home sells for less than what is owed on the chattel loan, the gap is the "deficiency," and a lender may seek a judgment for it.
Whether and how a lender can pursue a deficiency depends on state law and the loan agreement. Some states limit or bar deficiency judgments in certain circumstances, require specific procedures first, or cap the amount based on the property's value. The rules for homes treated as personal property can differ from those for real property.
Because the consequences can be significant and the rules vary widely, a deficiency is a situation where consulting a licensed attorney in your state is especially worth considering.
This is general information, not legal or financial advice.