Tennessee · Weigh your options
Can the lender come after you for the rest? Deficiency judgments in Tennessee
Yes, a Tennessee lender can sue you for the balance left after a trustee's sale. The law presumes the sale price equals the home's fair market value, but if you prove the home sold for materially less than its fair market value, the court uses fair market value instead. The lender must bring the deficiency lawsuit within two years after the sale, or sooner if the time limit on the debt itself runs out first.
Reviewed against Tennessee law and official sources on October 12, 2026. General information, not legal advice.
Deficiency rules in Tennessee, point by point
A deficiency needs a separate lawsuit
After the trustee's sale
Most Tennessee foreclosures happen out of court, so the sale itself does not create a money judgment against you. To collect the shortfall, the lender has to file a lawsuit and win a judgment.
Tenn. Code Ann. § 35-5-118
Two year deadline to sue
Within two years after the sale
The lender must bring the deficiency action within two years after the trustee's or foreclosure sale, or earlier if the statute of limitations on the debt would end first. Write down your sale date.
Tenn. Code Ann. § 35-5-118
Sale price is presumed to be fair market value
In the deficiency lawsuit
The court starts by assuming the sale price was the home's fair market value at the time of the sale. That presumption can be overcome, but the burden is on you.
Tenn. Code Ann. § 35-5-118
Prove the price was materially low
In your answer and at the hearing
If you show by a preponderance of the evidence that the sale price was materially less than fair market value, the court figures the deficiency using fair market value instead. Gather proof of what the home was worth on the sale date.
Tenn. Code Ann. § 35-5-118
Short sale and deed in lieu
Before you sign
We found no Tennessee statute that sets a deficiency rule for a short sale or deed in lieu, and the fair market value rule is written for trustee's and foreclosure sales. The written agreement controls, so ask for language that the deal fully satisfies the debt.
If you are sued
Before the answer deadline on the summons
File an answer on time, and raise the two year deadline and the value of the home if they apply. Help4TN and the Tennessee Alliance for Legal Services can point you to free legal help.
The short answer in Tennessee
Can the lender come after me for the rest?
LimitedThe lender can sue you for the balance left after the sale. The sale price is presumed to equal fair market value. If you prove the home sold for materially less than fair market value, the court figures the deficiency using fair market value instead. The lender must sue within two years after the sale, or sooner if the time limit on the debt itself runs out first.
Tenn. Code Ann. § 35-5-118
Common questions in Tennessee
Who has to prove the home's value in a Tennessee deficiency case?
You do. The law presumes the sale price equaled fair market value, so the lender does not have to prove value first. If you think the home sold too cheaply, you must bring evidence that the price was materially less than fair market value.
My Tennessee trustee's sale was more than two years ago. Can the lender still sue for a deficiency?
The deficiency statute requires the action to be brought within two years after the sale. If a lawsuit is filed later than that, you can raise the deadline as a defense in your answer. Do not ignore the papers, because a default judgment can be entered if you do not respond.
Does a Tennessee deficiency judgment come with the foreclosure notice?
No. The trustee's sale notice starts an out-of-court sale, and a deficiency requires a separate court case. If you get a letter asking for the balance, it is a demand, not a judgment, but take it to legal aid quickly.
Step by step
More on foreclosure in Tennessee
Understand the process
What is happening and how much time there is.
Weigh your options
What can stop it, and what happens if it goes ahead.
Get help now
Who to call, and what to do when a sale is scheduled.
Also in Tennessee
Property tax foreclosure Claim surplus funds Deficiency judgments (this page)Letters you may getBack to the Tennessee overview
Free, official, nationwide
Free help anywhere in the country
HUD-approved housing counselors
Free foreclosure prevention counseling from agencies approved by the U.S. Department of Housing and Urban Development. A counselor can review your budget and deal with your servicer alongside you.
(800) 569-4287CFPB: help for struggling homeowners
Plain-language guides from the Consumer Financial Protection Bureau, and a complaint form if your mortgage servicer is not following the rules.
Legal Services Corporation: find legal aid
Find the free civil legal aid office for your county if you have been served with a foreclosure lawsuit or given a sale date and cannot afford a lawyer.
Ask a question
Need help avoiding foreclosure in Tennessee?
Tell us where things stand. A person reads every message and writes back with the options that fit your situation and the free, official help available in Tennessee.
- Free. There is nothing to buy and no fee, ever.
- No loan number, Social Security number or documents needed.
- We are not your lender, a law firm or a government agency.
If a sale is days away, do not wait for an email. Call a free HUD-approved housing counselor now at (800) 569-4287.
Sources for this page
- Tennessee Public Chapter 515 (2025), rewriting Tenn. Code Ann. § 35-5-101 (including (g), sale location), effective July 1, 2025
- Tennessee Public Chapter 1001 (2010), deficiency judgments (codified at § 35-5-118)
- Tennessee Public Chapter 834 (2010), notice of the right to foreclose (former § 35-5-117)
- Tennessee Public Chapter 122 (2011), repealing § 35-5-117 effective January 1, 2013
- THDA: Homeowner's Assistance Fund
- THDA: Foreclosure Prevention
- JCR, LLC v. Hance, No. E2022-00765-COA-R3-CV (Tenn. Ct. App. Aug. 28, 2023)