foreclosed property due to non payment.

You don't set forth on what basis you foreclosed on the property, but assuming that you foreclosed as part of a process to set off the value of the property against a debt, rather than foreclosing on a non-recourse mortgage (which limits your recovery to the property provided as security, regardless of whether it is sufficient to cover the debt), the debt would only be reduced by the value of the property which would be reduced by the amount of damage, or clean up costs (whichever is less).  You still retain all collection remedies to collect the balance of the debt.  After you have obtained a judgment you may, for example, garnish the debtor's income, levy on other assets such as bank accounts, etc.