Louisiana homeowners who go through a foreclosure, either an ordinary foreclosure or an executory proceeding, might face a deficiency judgment afterward. But only if the foreclosing lender follows certain procedures.
Louisiana law says how a lender may get a deficiency judgment.
How Deficiency Judgments Work (What Is a Deficiency Judgment?)
If a property sells at a foreclosure sale for less than the full outstanding mortgage debt, the difference is commonly called a "deficiency balance." Some states allow a foreclosing lender to get a deficiency judgment (a personal judgment) against the borrower for the amount of the deficiency balance.
Once a lender gets a deficiency judgment, the lender is entitled to use common collections methods to collect the deficiency from the borrower by, for example, garnishing wages or levying a bank account.
Are Deficiency Judgments After a Home Foreclosure Allowed in All the States?
Some states have anti-deficiency laws prohibiting deficiency judgments after foreclosure in certain circumstances.
Are Deficiency Judgments Allowed in Louisiana?
Yes. Louisiana doesn't have an anti-deficiency law, so deficiency judgments are allowed. But the lender must follow a certain procedure.
What Happens After a Foreclosure in Louisiana?
Louisiana foreclosures are judicial, but the process may be an ordinary judicial foreclosure or an executory proceeding.
Ordinary judicial foreclosures. In an ordinary judicial foreclosure in Louisiana, the lender files a civil lawsuit against the borrower, and the suit goes through the regular litigation process.
Executory proceeding. With an executory proceeding (the most common type of judicial foreclosure in Louisiana), the borrower "confesses” to a judgment in the mortgage contract. So, if the borrower defaults (fails to make payments), the lender may file a foreclosure petition with the court, along with a copy of the mortgage, and the court summarily orders the property seized and sold. To fight the foreclosure, the borrower has to appeal or bring a lawsuit asking the court to stop the foreclosure.
You might face liability for paying a deficiency judgment after either type of foreclosure.
What Are the Legal Requirements for a Deficiency Judgment in Louisiana?
To get a deficiency judgment with an executory proceeding, the lender must:
- convert the executory proceeding into an ordinary foreclosure proceeding, or
- file a separate lawsuit for the deficiency. (La. Code Civ. Proc. Art. 2772 (2025).)
The court may grant a deficiency judgment if the property was appraised before the sale. (La. Code Civ. Proc. Art. 2771, La. Rev. Stat. § 13:4106 (2025).)
The lender may get a deficiency judgment as part of an ordinary foreclosure proceeding.
How to Calculate the Amount of a Foreclosure Deficiency in Louisiana
Suppose your home is sold at a foreclosure sale for $350,000. Unfortunately, you owed the lender $370,000 at the time of the sale. The deficiency balance in this example is $20,000. So, the lender may seek a deficiency judgment for $20,000 against you.
Do Foreclosures Always Result in a Deficiency?
If the sale price equals or exceeds the mortgage debt amount, there's no deficiency. In fact, if the sale results in surplus funds (more than what's needed to pay off any other liens, like a second mortgage or HELOC), you might be entitled to that extra money following the foreclosure sale.
Is It Possible to Avoid a Deficiency Judgment in Louisiana?
A few ways to potentially avoid a deficiency judgment are:
- Negotiating a settlement of a deficiency. If you lost your home to a foreclosure sale, which resulted in a deficiency, you might be able to work out a settlement with the lender 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.
- Completing a short sale or deed in lieu of foreclosure (before the sale) in which the lender waives the deficiency. If you owe more than your home is worth, the lender might be willing to let you complete a short sale or deed in lieu of foreclosure. But it’s fairly common for lenders to insist borrowers pay all or some of the deficiency after one of these transactions or for the lender to reserve the right to go after you for a deficiency judgment. If you're doing a short sale or deed in lieu for the sole purpose of avoiding a deficiency judgment, make sure that the lender agrees in writing to give up its right to the deficiency. Again, there could be tax consequences if the lender forgives the deficiency.
- Filing for bankruptcy. You might be able to eliminate or reduce your liability for a deficiency if you file for bankruptcy.
Getting Help With a Louisiana Foreclosure
Talk to a foreclosure lawyer if you’re interested in finding out more about deficiency judgments in Louisiana, possible foreclosure defenses in your case, or alternatives to a foreclosure. If you need help applying for a way to avoid a foreclosure, like by completing a modification, short sale or deed in lieu of foreclosure, consider talking to a HUD-approved housing counselor.