If your property's not worth enough to pay what you owe on the mortgage, you're in a situation known as 'negative equity'. If the property's then sold - either by you, or by the lender after they take possession - that negative equity becomes the shortfall. It's the debt that remains after the sale proceeds have been used up.

The shortfall debt may include the monthly instalments and interest added while your property's being sold. If the sale's being handled by your lender, the debt might also include legal costs and estate agency fees.