A deficiency balance on foreclosure—also known as a mortgage deficiency or deficiency balance—occurs when a home or property is foreclosed on and the sale proceeds are not sufficient to pay off the mortgage. The remaining balance owed on the mortgage is a deficiency balance or mortgage deficiency.

And if a mortgage lender (bank or mortgagee) files a lawsuit against a mortgagor (debtor) who defaulted on a mortgage, the lender may obtain a court judgment known as a deficiency judgment. With this judgment the lender can try to garnish the debtor’s wages or go after the debtor’s other assets for payment or satisfaction of the deficiency judgment.

A deficiency judgment may be discharged in Chapter 7 or Chapter 13 bankruptcy.

Laws vary from state to state and a state’s laws and the terms of the mortgage may determine whether the mortgage lender will pursue a mortgagor who defaulted on a mortgage for any deficiency balance.

In Mississippi, if a property is foreclosed upon and the sale does not cover the outstanding mortgage balance, the lender may pursue a deficiency balance or mortgage deficiency from the borrower. This means the lender can file a lawsuit to obtain a deficiency judgment against the borrower for the remaining amount owed. If the lender is successful in court, they may then take legal action to collect the debt, which could include garnishing wages or seizing other assets of the debtor. However, it's important to note that the borrower has the option to discharge the deficiency judgment through bankruptcy under Chapter 7 or Chapter 13. The specifics of whether a lender will seek a deficiency judgment can depend on the terms of the mortgage contract and Mississippi state law. Borrowers facing a potential deficiency judgment should consult with an attorney to understand their rights and options under Mississippi law.