Florida Deficiency Judgments | What You Could Still Owe

When a home sells for less than what’s owed on it, whether through foreclosure or a short sale, the gap between the sale proceeds and your loan balance is called a deficiency. The question every homeowner in this situation should ask is simple. What happens to that gap?

What a Deficiency Means in a Foreclosure

In a Florida foreclosure, the lender can pursue you for the deficiency after the sale. That means the foreclosure itself may not be the end of it. You could lose the home and still face collection on the remaining balance, on the lender’s timeline and terms.

The Deficiency Waiver in a Short Sale

This is one of the most important reasons a well-negotiated short sale beats letting a foreclosure run its course. A skilled negotiator works to secure a deficiency waiver, where the lender agrees in writing not to pursue you for the remaining balance after closing. That waiver is not automatic. It’s negotiated, and it should be confirmed in writing before you proceed. Getting it is a significant part of what a Certified Short Sale Expert is trained to do.

The Tax Question

Forgiven debt can have tax consequences. The federal exclusion that let homeowners avoid income tax on forgiven mortgage debt expired on January 1, 2026, and it hasn’t been extended. It can still apply if your debt forgiveness is covered by a written agreement entered into before that date, even if the sale closes later, and other exclusions such as insolvency may apply to your situation. Much of what’s online still describes the old rule as current law. Talk with a tax professional before assuming anything either way.

The Bottom Line

The deficiency is where distressed homeowners get hurt after the sale, and it’s also where the right negotiation protects you most. If you’re weighing a short sale against a foreclosure, this single issue should be part of your very first conversation.

Contact me directly to talk about your situation, confidentially, Michele Lee Scherger, CSSE, GRI, CDPE | 561-309-2950

This page is general information, not legal or tax advice. An attorney or tax professional can review the specifics of your situation.