Foreclosure in Virginia can be a devastating event, both emotionally and financially. Because Virginia law allows non-judicial foreclosure, which permits your lender to sell your home at a public sale without going to court, the sale process is typically quicker than in most other states -- you will usually lose your home in 60 to 90 days after the initial foreclosure action. However, losing your home is not the only consequence of foreclosure in Virginia. In some cases, it can also result in garnishment of your wages.
Sale Process
If the mortgage lender opts for non-judicial foreclosure, which is less expensive for the lender than judicial foreclosure, it must advertise the upcoming public sale in a newspaper in your county, and must also send you a copy of the advertisement at least 14 days before the sale. The foreclosure trustee will then sell the home to the highest bidder. Unlike other states that provide a right of redemption, Virginia does not allow you to reclaim the home after the sale by paying the mortgage balance and foreclosure costs.
Deficiency
Although the purpose of the foreclosure sale is to recover the loan balance and foreclosure costs with the proceeds of the public sale, the lender may not sell the home at a price high enough to cover these costs. If the sale price is less than your mortgage balance and foreclosure costs, the difference is called a deficiency. In Virginia, you are responsible for paying the deficiency even though you no longer own the property.
Garnishment in Deficiency Judgment
If you owe a deficiency amount after a foreclosure sale in Virginia, the lender can file a lawsuit against you in your county court to obtain a judgment against you. The foreclosure judgment makes you legally liable for the deficiency balance, and gives the lender the right to pursue collection of the deficiency through involuntary means, which includes garnishment of your wages. The court may also impose interest of up to nine percent per year on an unpaid foreclosure judgment.
Garnishment Limits
Virginia adheres to federal limitations on wage garnishment for privately held debts, including foreclosure deficiencies. If your income is below a specified threshold, which is based on the federal minimum hourly wage times 30 hours per week, your wages are exempt from garnishment. This threshold applies regardless of hours actually worked. For example, as of the time of publication, the federal minimum hourly wage is $7.25. This makes the weekly minimum threshold $217.50 per week. If your wages are higher than this amount, your lender may take 25 percent of your post-tax earnings to satisfy a foreclosure deficiency.
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