Deficiency After Foreclosure in Virginia. Do I Have a Recourse or Non-Recourse Mortgage? – MDR

Photo Credit: TaberAndrew

Hi. I lost a home to foreclosure in Virginia two years ago.

I had no education about deficiencies until I started getting phone calls from a company called LCS Financial services.

Well now I have found that the debt was given to this collection agency and they are asking for a whopping $100,000. So far no judgment has been filed but they are calling everyday and I do not have the money. This debt was on a property in my name only. They sent the letter to the old foreclosed address.

It just so happens the new owner knows me and gave me the letter. The property where I live now is a joint property. I am current on all other debts including my mortgage and have just started to turn my finances around. I talked to an atty who said it would be a shame to file bankruptcy when I am not behind on any other debts plus from everything I know about the means test my household income will be too much to qualify for a chapter 7 or chapter 13.

Trying to find helpful information on deficiencies in Virginia has been futile. The question is should I try settling with them myself to keep this from lingering over my head and how much can I expect them to settle for? Should I force them to take me to court and prove they are who they say they are?


Dear MDR,

It is my understanding that in Virginia a lender can pursue you for the balance due on a mortgage following a foreclosure. It is a recourse state.

You should certainly meet with an attorney in your area to confirm this and come up with a plan of action to deal with the deficiency which may lead to a judgment against you.

As with any debt, you can negotiate with the note holder to settle the debt or make a payment arrangement, pay back the amount owed, or wait for a lawsuit and then judgment and possible garnishment or lien.

Bankruptcy is the only legal way to break the bonds of an obligation. Income alone is not the determining factor in if you qualify for a Chapter 7 or Chapter 13 bankruptcy. I strongly suggest you click here to find a local bankruptcy attorney and discuss your specifics with them.

There is no need to wait till you get sued and have a case pending against you to do this homework.

Please post your responses and follow-up messages to me on this in the comments section below.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Do you have a question you'd like to ask me for free? Go ahead and click here.
Damon Day - Pro Debt Coach
Follow Me
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
Steve Rhode
Follow Me

Leave a Comment