Q: Hello, Through a tragic accident and huge medical bills, my daughter had her house foreclosed on a week ago.

A: The trustee or substitute trustee who sells real estate in Virginia at a foreclosure auction at the direction of the noteholder must account for the proceeds of the sale to the county or city Commissioner of Accounts in the jurisdiction where the property is located. The provisions of the deed of trust and Virginia Code Section 55.1-324 govern the disposition of the proceeds of sale as follows:

"...first, to discharge the expenses of executing the trust, including a reasonable commission to the trustee; secondly, to discharge all taxes, levies, and assessments, with costs and interest if they have priority over the lien of the deed of trust, including the due pro rata thereof for the current year; thirdly, to discharge in the order of their priority, if any, the remaining debts and obligations secured by the deed, and any liens of record inferior to the deed of trust under which sale is made, with lawful interest; and, fourthly, the residue of the proceeds shall be paid to the grantor or his assigns, provided, however, that the trustee as to such residue shall not be bound by any inheritance, devise, conveyance, assignment, or lien of or upon the grantor's equity, without actual notice thereof prior to distribution, and provided further that such order of priorities shall not be changed or varied by the deed of trust. The trustee's deed shall show the trustee's mailing address."

Anyone with an interest in the proceeds of sale of a foreclosure auction should consult with an experienced Virginia creditor-debtor lawyer.