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How to claim foreclosure surplus funds in Tennessee

If a Tennessee trustee's sale brings in more than the debt and sale costs, the extra should go to junior lienholders and then to you. We did not find a Tennessee statute that sets the claim steps, so you claim by writing to the trustee, and trustees sometimes deposit the money with a chancery court instead. Act quickly and keep a written record.

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Reviewed against Tennessee law and official sources on October 12, 2026. General information, not legal advice.

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How to claim surplus funds in Tennessee

  1. The trustee holds the money

    From the sale

    The trustee or substitute trustee named in your sale notice receives the sale money and pays the debt and sale costs. We did not find a Tennessee statute that tells the trustee how or when to pay surplus to the former owner.

  2. Ask for an accounting in writing

    Right after the sale

    Write to the trustee, ask for the sale price, the payoff, the costs and any surplus, and give a current mailing address. Keep a copy of your letter and proof of mailing.

  3. Junior lienholders are paid first

    Before any money is paid to you

    A second mortgage or other lien on the home can be paid from the surplus before you. In one Davidson County case, the holder of a second deed of trust was awarded the surplus plus its attorney's fees.

    Wheelhouse Partners, LLC v. Wilson & Assocs., PLLC (Tenn. Ct. App. 2023)

  4. If the trustee files the money with a court

    When claims conflict

    A trustee can interplead the surplus, which means depositing it with the court and letting the judge decide who gets it. If that happens, file your claim in that case through the clerk and master.

    Wheelhouse Partners, LLC v. Wilson & Assocs., PLLC (Tenn. Ct. App. 2023)

  5. Unclaimed money goes to the state Treasury

    After the unclaimed property waiting period

    Money no one claims can be turned over to the Tennessee Department of Treasury as unclaimed property. Searching and claiming through the Treasury is free.

    Tenn. Code Ann. § 66-29-101 et seq.

  6. Limits on locator fees

    For money already held by the Treasury

    A locator contract for money held by the Treasury cannot charge more than 10 percent of the value or $50, whichever is greater, and must be approved by the Treasury. We found no fee cap for surplus still held by a trustee, so do not sign a contract before you ask the trustee yourself.

    Tenn. Code Ann. § 66-29-176

  7. Excess after a property tax sale

    File a motion after the court confirms the tax sale

    Excess from a court-ordered property tax sale is claimed by a motion in the tax case, under a separate statute. See our Tennessee property tax foreclosure page.

    Tenn. Code Ann. § 67-5-2702

What Tennessee law says about leftover sale money

Surplus after a mortgage foreclosure sale

If the home sells for more than the debt and sale costs, the extra should go to junior lienholders and then to you, but we could not confirm the Tennessee statute or the claim steps. Write to the trustee named in your sale notice, ask for an accounting of the sale, and give a current mailing address. Talk to legal aid if the trustee does not answer.

Common questions in Tennessee

Is there a deadline to claim surplus from a Tennessee trustee's sale?

We did not find a deadline in Tennessee law. The risk of waiting is that the money is paid to another claimant, filed with a court, or turned over to the Treasury as unclaimed property. Write to the trustee as soon as you can after the sale.

A company says it found my Tennessee foreclosure surplus. Should I sign?

You can ask the trustee or the Treasury yourself for free. If the money is already with the Treasury, a locator cannot charge more than 10 percent or $50, whichever is greater, and the contract must be approved by the Treasury. The Treasury also says locators must be registered, and a state commission has ruled they must be licensed private investigators.

Can my second mortgage lender take the surplus from my Tennessee foreclosure?

Yes. Liens that were behind the foreclosed loan are generally paid from the surplus before the former owner. If you think the amount the second lender claims is wrong, ask for its payoff in writing and get legal help before the money is paid out.

Step by step

More on foreclosure in Tennessee

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What is happening and how much time there is.

Weigh your options

What can stop it, and what happens if it goes ahead.

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Who to call, and what to do when a sale is scheduled.

Also in Tennessee

Property tax foreclosure Claim surplus funds (this page)

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Sources for this page

  1. CTAS: Delinquency Date
  2. CTAS: Interest on Delinquent Taxes
  3. CTAS: Delivery of Delinquent Tax List to Attorney
  4. CTAS: Delinquent Tax Suit
  5. CTAS: Notice of Tax Suit
  6. CTAS: The Tax Sale
  7. CTAS: Setting Aside a Tax Sale
  8. CTAS: Redemption
  9. CTAS: Disposition of Property Purchased by County at Tax Sale
  10. CTAS: Escheat of Funds
  11. CTAS: Tax Relief
  12. CTAS: Property Tax Freeze Act
  13. Tennessee General Assembly: SB1983 (Public Chapter 971 of 2026)
  14. SB1983 / HB1932 bill text
  15. Hamilton County v. Tax Year 2018 Delinquent Taxpayers (Tenn. Ct. App. 2024)
  16. Wheelhouse Partners, LLC v. Wilson & Associates, PLLC (Tenn. Ct. App. 2023)
  17. Blount County Clerk & Master: Excess Proceeds
  18. Davidson County Clerk & Master: Information to Claim Excess Sale Proceeds
  19. Tennessee Department of Treasury: Third-Party Locators
  20. Tennessee Department of Treasury: Unclaimed Property
  21. Tennessee Public Chapter 515 (2025), rewriting Tenn. Code Ann. § 35-5-101 (including (g), sale location), effective July 1, 2025
  22. Tennessee Public Chapter 1001 (2010), deficiency judgments (codified at § 35-5-118)
  23. Tennessee Public Chapter 834 (2010), notice of the right to foreclose (former § 35-5-117)
  24. Tennessee Public Chapter 122 (2011), repealing § 35-5-117 effective January 1, 2013
  25. THDA: Homeowner's Assistance Fund
  26. THDA: Foreclosure Prevention
  27. JCR, LLC v. Hance, No. E2022-00765-COA-R3-CV (Tenn. Ct. App. Aug. 28, 2023)