If you go through a nonjudicial foreclosure in Georgia, but your home sells for less than you owe the bank on your mortgage loan, the bank might sue you afterward for a "deficiency judgment." However, if the bank doesn’t take specific steps within a limited time after the foreclosure sale, you won’t be on the hook for paying the deficiency.
How Foreclosures in Georgia Work
If you don't make your monthly mortgage payment, the loan servicer usually can't immediately refer the loan to an attorney for foreclosure. A federal mortgage servicing law prohibits the servicer from starting a foreclosure in most cases unless the loan is more than 120 days overdue.
But once the preforeclosure waiting period expires, a foreclosure may start. A foreclosure in Georgia could be judicial or nonjudicial.
- Judicial foreclosures in Georgia. With a judicial foreclosure, the bank files a lawsuit in court.
- Nonjudicial foreclosures in Georgia. Nonjudicial foreclosures, however, don’t involve the courts. In a nonjudicial foreclosure, a bank takes certain out-of-court steps. These steps are set out in the state statutes.
Georgia foreclosures are usually nonjudicial.
Nonjudicial Foreclosure Procedures in Georgia
You won't get much notice before a Georgia foreclosure sale. Under Georgia law, the bank must mail a notice of intent to foreclose to you at least 30 days before the foreclosure sale. So, you'll probably get around a month's notice before the sale. The notice includes the name, address, and telephone number of someone authorized to negotiate a loan modification. It will also include a copy of the newspaper advertisement (see below). (Ga. Code § 44-14-162.2 (2025).)
The bank also ordinarily provides a notice about how you can avoid attorneys’ fees by paying the total outstanding debt (principal and interest) within ten days of the notice. (Ga. Code § 13-1-11 (2025).) While the bank could send this information in a separate letter, it often accompanies the 30-day notice of intent to foreclose.
Notice of the foreclosure sale must also be published in a newspaper for four weeks before the sale. (Ga. Code § 9-13-140 (2025).)
Foreclosure Auctions in Georgia
With either type of foreclosure, the process ends when the property is sold at a foreclosure sale. At the sale, the bank can bid up to the total amount of the debt, including foreclosure fees and costs, or it might bid less.
At a foreclosure sale, the foreclosing bank gets a credit up to the amount of the borrower's total debt, so it bids using a "credit bid." Other interested parties can also bid on the property at the foreclosure auction.
What Is a Deficiency?
The difference between the mortgage debt and a lower sale price at a foreclosure auction is called a "deficiency." The deficiency amount is determined by the winning bid at the foreclosure sale.
Do All Foreclosures End in a Deficiency?
If the sale price equals or exceeds the mortgage debt amount, you won't have to pay a deficiency judgment because no deficiency exists. In fact, if the sale results in surplus proceeds, that extra money might go into your hands following the foreclosure auction.
On the other hand, if the property had any junior liens, such as a second mortgage or home equity loan, or someone recorded a judgment lien against the property, those parties get first crack at the money to pay off the amount they’re owed. Then, any funds left over after paying off these liens belong to the foreclosed homeowner.
What Is a Deficiency Judgment After a Foreclosure Sale?
If state law allows it, the bank can seek a personal judgment against the borrower to recover the deficiency after a foreclosure. This kind of money judgment is called a “deficiency judgment.”
In some states, the bank may ask for a deficiency judgment as part of a judicial foreclosure. In other states, the bank has to file a separate lawsuit against the borrower after the foreclosure to get a deficiency judgment.
How a Bank Collects a Deficiency Judgment
Once a bank gets a deficiency judgment, it may generally collect the deficiency from the borrower through typical collection techniques, like garnishing wages or levying a bank account.
Does Georgia Allow Deficiency Judgments?
Again, yes, Georgia generally allows deficiency judgments after foreclosures.
What Are the Legal Requirements for a Deficiency Judgment After a Nonjudicial Foreclosure in Georgia?
Even though most Georgia foreclosures are nonjudicial, a court plays a small role in the process if the bank wants to get a deficiency judgment. Within 30 days of the foreclosure sale, the bank has to report the sale to the court and prove to the court that:
- the home sold for its true market value at the foreclosure sale, and
- all foreclosure procedures were followed. (Ga. Code § 44-14-161(a) (2025).)
If this deadline is missed, the bank can't get a deficiency judgment.
The court then holds a hearing to confirm the foreclosure sale. The foreclosed borrower may give evidence that the home sold for an unfair price or that the foreclosure process was defective. If the court confirms the sale, the bank may then file a lawsuit against the borrower to get a deficiency judgment. But if the court decides the sale wasn't proper, the court may order a resale of the home. (Ga. Code § 44-14-161(b),(c) (2025).)
Can You Avoid a Deficiency Judgment in Georgia?
Even if your bank gets a deficiency judgment, you can probably eliminate your liability for a deficiency judgment, like many other dischargeable debts, in a Chapter 7 or Chapter 13 bankruptcy. Or you might be able to raise a defense to the deficiency action, like the bank didn't follow the correct procedures to get the judgment.
Or you might be able to work out a settlement with the bank to accept less than the full deficiency amount and forgive the rest. Generally, however, the IRS considers forgiven debt as taxable income, subject to some exceptions.
Getting Help With a Foreclosure in Georgia
If you’re facing a Georgia foreclosure and want to learn about potential defenses, whether the bank is likely to come after you for a deficiency judgment in your circumstances, or other information about the process, consider talking to a foreclosure lawyer.
A foreclosure attorney can also explain the different options that might be available to prevent a foreclosure, like a loan modification, short sale, or deed in lieu of foreclosure. If you can’t afford to hire a lawyer, consider speaking with a HUD-approved housing counselor.