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What happens to the shortfall on my mortgage?

FAQs | Bankruptcy and Your House

Mortgage shortfall arises where your property has been sold by the lender and sale proceeds were insufficient to clear all monies owing to the lender. Any mortgage amount left unpaid is called the shortfall. Your bankruptcy will clear the shortfall whether the property was sold by the lender before or after the date of your bankruptcy. You do not need to wait till the lender has sold the property before filing for bankruptcy.

For further information on bankruptcy, we recommend our articles ‘Pathways to Bankruptcy – Essential Facts’, ‘Life During Bankruptcy’ and ‘The Bankruptcy Option Explained’.

Nicholls & Co have a complementary ‘help desk’ to answer your questions on bankruptcy. Call Nicholls & Co on 1300 060 122 or email

Alan Nicholls - Registered Trustee

Alan Nicholls’ no obligation help desk

Nicholls & Co provide a free, no obligation ‘help desk’ for people considering bankruptcy – we discuss and explain bankruptcy and answer questions for anyone who is considering bankruptcy. The Nicholls & Co help desk can be accessed by phone  
1300 060 122  or . Alan Nicholls, Registered Trustee in Bankruptcy is also available to answer your questions to enable you to decide if bankruptcy is right for you.