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

Deficiency rules in Nebraska, point by point

• After a trustee's sale: a 3-month window to sue

  Within 3 months after the trustee's sale

  If your home was sold by a trustee under a trust deed, the lender can sue for the balance only if it files within 3 months after the sale. The complaint must list the full debt, the sale price and the home's fair market value on the sale date.

  Neb. Rev. Stat. § 76-1013

• Fair market value caps what you can owe

  Before the court enters any deficiency judgment

  The judge must find the home's fair market value on the sale date. The judgment cannot be more than the debt, interest and sale costs minus that value, and it can never be more than the debt minus the actual sale price. A low auction price does not automatically raise what you owe.

  Neb. Rev. Stat. § 76-1013

• After a court foreclosure: a separate case on the note

  While the foreclosure is pending and after the decree

  In a court foreclosure, the judge orders the sale and possession, and the lender cannot sue you on the debt while the case is pending or after the decree unless the court allows it. Court decisions printed with the statute say this keeps you from facing two judgments for the same debt.

  Neb. Rev. Stat. §§ 25-2139, 25-2140

• The judge can refuse a low sheriff's sale

  At the confirmation hearing, after at least 10 days' notice

  If the sheriff's sale brought less than the decree and the home is worth at least the decree amount, the court may refuse to confirm the sale. You must get notice of the confirmation hearing, so that hearing is your chance to point out a low price before any shortfall is set.

  Neb. Rev. Stat. § 25-1531

• Short sale or deed in lieu: the written deal controls

  Before you sign

  We found no Nebraska statute that limits a deficiency after a short sale or a deed in lieu. Whether you still owe a balance depends on what the written agreement says, so look for clear words that the lender waives any deficiency before you sign.

• How a deficiency judgment is collected

  Execution must issue within 5 years or the judgment goes dormant

  A judgment becomes dormant and stops being a lien if no execution is issued for 5 years, and a dormant judgment can be revived only within 10 years after that. If your wages are garnished, the creditor can take no more than 25 percent of disposable earnings, or 15 percent if you are the head of a family, and less if your pay is low.

  Neb. Rev. Stat. §§ 25-1515, 25-1420, 25-1558

• If you get a deficiency letter or lawsuit

  By the answer deadline on the summons

  Check the date of the sale and the date the lawsuit was filed, because a trustee's sale claim filed after 3 months is late. Answer the lawsuit on time and ask for help from Legal Aid of Nebraska, since the fair market value finding is where most of the money is decided.

  Neb. Rev. Stat. § 76-1013

The short answer in Nebraska

Common questions in Nebraska