Can the lender come after you for the rest? Deficiency judgments in Colorado

Deficiency rules in Colorado, point by point

• The bid shows the deficiency before the sale

  Bid due by noon, 2 business days before the sale

  The lender must send the public trustee or sheriff a signed bid that itemizes everything it claims, its initial bid, and the deficiency. The officer must make the bid information available to the public, so you can see the claimed shortfall before the sale.

  C.R.S. § 38-38-106(1), (2), (3)

• Fair market value bid rule

  At the sale

  The lender must bid at least its good faith estimate of fair market value, less unpaid property taxes, liens senior to its own, and estimated reasonable costs of holding, marketing and selling the home. It never has to bid more than the total amount due.

  C.R.S. § 38-38-106(6)

• A low bid is a defense

  If you are sued for a deficiency

  If the lender bids less than the amount the rule requires, the sale is still valid, but anyone sued for a deficiency can raise that failure as a defense. The same rule covers public trustee sales and sheriff's sales in court foreclosures.

  C.R.S. § 38-38-106(6)

• Time limit to sue

  Six years after the debt is due

  Colorado gives six years to sue to collect a liquidated debt or to enforce rights under an instrument securing or evidencing a debt. A claim for money owed accrues when the debt becomes due. Ask a lawyer how that applies to your loan.

  C.R.S. §§ 13-80-103.5(1)(a), 13-80-108(4)

• Short sale or deed in lieu

  Before you sign

  We found no Colorado statute that cancels the balance after a short sale or deed in lieu, so the written agreement controls. Ask for a written release of any remaining debt.

• How a judgment is collected

  Up to 20 years from a district court

  A recorded judgment becomes a lien on your real estate in that county for six years unless revived. Execution on a district court judgment can issue for 20 years (six years for county court) unless revived. Garnishment is limited to the lesser of 20 percent of disposable earnings or the amount above 40 times the federal or state minimum hourly wage.

  C.R.S. §§ 13-52-102, 13-54-104(2)(a)

• If your pay is garnished

  File a written objection

  You can object and ask for a hearing to show that, after garnishment, your household cannot pay basic living costs such as rent, utilities, food, medical care, child care and transportation. If the court agrees, it must protect more of your pay.

  C.R.S. § 13-54-104(2)(a)(I)(D)

The short answer in Colorado

Common questions in Colorado