Can a bank garnish my wages for non-payment of a line of credit loan?

I have a line of credit loan for my house instead of a mortgage. The loan is with PNC. If I default and the property is sold at auction, can the bank sue me to recovery the difference, if the selling price does not cover the amount of the loan?

Asked on July 27, 2010 under Bankruptcy Law, Pennsylvania


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Yes, unfortunately; if a secured loan is defaulted on and the property selling it foreclosed upon and sold, then if the property does not bring in sufficient proceeds to pay the balance of the remaining balance of the loan, the lender can sue you for any "deficiency" (often called a obtaining a "deficiency judgment")--that is, the amount not paid through the proceeds of foreclosure. In that event, if you are sued and the lender wins, if you do not pay the judgment, the lender can use various mechanisms to collect, including garnishing a bank account or your wages. Note that a HELOC and a mortgage are, in most ways, functionally the same.

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