Deficiency as a term that usually refers to any debt remaining after a creditor sells assets securing a loan. For example, if a bank foreclosed on a house for $500,000 but the debt owed is $550,000, the deficiency would be $50,000. Deficiency also may refer to insufficient payments to the IRS which may incur penalties.
[Last updated in July of 2021 by the Wex Definitions Team]