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Copyright (c) 1975 Tulane University
Tulane Law Review

COMMENT: Deficiency Judgments in Louisiana

May, 1975

Tulane Law Review

49 Tul. L. Rev. 1094


Frederick T. Kolb



A deficiency judgment is a judgment rendered in favor of a creditor for the difference between the amount of a debt and the amount realized in a judicial (public) sale held for the satisfaction of that debt. The rules governing deficiency judgments in Louisiana are set forth in two articles of the Code of Civil Procedure, articles 2771 and 2772, and two revised statutes, La. R.S. 13:4106 and 4107 (the Deficiency Judgment Act). 1 Prior to the enactment of the Deficiency Judgment Act, most mortgage instruments in Louisiana contained a waiver of appraisement. When property values were depressed and the economy was recessionary, the mortgagee foreclosing on the property could commonly buy it at public sale for a low price. The low return on the sale would allow the mortgagee to obtain a personal judgment against the mortgagor for a greater amount than if there had been appraisement and its accompanying safeguards. 2 Thus, the mortgagor could have other property seized and sold in satisfaction of the personal judgment. 3 The Act remedies this inequity.

The Deficiency Judgment Act first appeared in our law as Louisiana Act of 1934, No. 28 4 and was amended in 1952. 5 The Act requires an appraisal prior to judicial sale if the creditor is to preserve his right to pursue the debtor for any unsatisfied portion of the claim. The first sale may be consummated only if the bid price equals at least two-thirds of the appraised value. If ...
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