If you own commercial or residential real estate near Atlanta , you may have taken out a loan to initially pay for the real estate. If you put up collateral with the loan and then default, and the collateral is sold for less than the outstanding balance, the remaining amount owed is the deficiency balance.

A lender can sue a borrower over a deficiency balance, though that doesn’t mean they will. The purpose of the lawsuit is to recoup the lender’s losses, so if the deficiency balance is low, it generally isn’t worth the time and money to pursue a lawsuit. Defending yourself against a lawsuit brought against you due to a deficiency balance can be difficult and costly. Oftentimes, your only defense will be the discovery of an error in the original loan process.

If you know your real estate investment will soon be repossessed, you can avoid a deficiency balance by asking the lender to reinstate your contract so you can sell the property yourself with help from a short sale realtor. This may help you avoid having a deficiency balance.