When a home sells at a foreclosure auction, the foreclosure sale price is sometimes less than what the borrower owes on the loan. A “deficiency” is the difference between what you owe on the loan and the amount received from your property’s sale. In some states, the foreclosing bank can ask a court for a personal judgment—called a “deficiency judgment”—against you for the deficiency amount. Other states have anti-deficiency laws.
Below you can find details about deficiency judgment laws in your state and under what circumstances you might be liable for paying taxes on canceled debt.