Even if your home is sold in foreclosure, you may still be on the hook for the difference between the amount you owe the bank and the amount the property sold for. Years later, the bank may come after your paycheck to recoup there losses.

Unless, of course, you live in a non-recourse state.

In non-recourse states, homeowners cannot be held personally liable for more than a forclosed property sells for. The debt is completely satisfied at the time of sale and lenders cannot sue to make up for lost funds. To learn more, take a look at this list of non-recourse states.

Keep in mind that laws change from time to time and that state code can be complicated to understand. If you’re facing foreclosure, consult with an attorney before making any decision based on potential recourse.

photo credit: respres

Tags | HELOC foreclosure, non-recourse states, recourse states