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 Wyoming, if a property is foreclosed upon and the sale does not cover the outstanding mortgage balance, the lender may be left with a deficiency balance. Wyoming law allows lenders to seek a deficiency judgment against the borrower for this remaining debt. If the lender obtains a deficiency judgment, they can pursue collection efforts, which may include garnishing the borrower's wages or seizing other assets. However, the borrower has the option to discharge the deficiency judgment through Chapter 7 or Chapter 13 bankruptcy. It's important to note that the specifics of whether a lender will pursue a deficiency judgment can depend on the terms of the mortgage agreement and the lender's policies. Borrowers facing a potential deficiency judgment should consult with an attorney to understand their rights and obligations under Wyoming law.