Short answer
If your Georgia property was sold in a nonjudicial foreclosure, surplus funds (money left after paying off the debt and sale costs) are held by the foreclosing attorney—not the county—and do not remain available indefinitely. The longer you wait to act, the fewer options you may have to claim any remaining funds.
Why it matters
Losing a home is difficult, but if the foreclosure sale brought in more than what was owed, there may be surplus funds available. Understanding how and when to claim these funds is crucial because:
- Financial recovery: Surplus funds can help you start over or address other debts.
- Strict process: Georgia’s nonjudicial foreclosure process is fast and final—missing steps or deadlines can mean losing access to funds.
- Distribution order: Funds are paid out in a strict order: sale costs and attorney’s fees, then the mortgage debt, then any junior lienholders, and finally the former owner.
- No automatic payment: You must take action to claim any surplus; the process is not automatic.
Steps
If you are a former homeowner seeking surplus funds after a Georgia foreclosure, here’s what to do:
Confirm the type of foreclosure: Georgia uses a nonjudicial foreclosure process, meaning no court judgment is required for the lender to sell the property. Sales are held on the first Tuesday of the month on the county courthouse steps.
Identify the foreclosing attorney: The attorney who handled the foreclosure sale is responsible for holding any surplus funds—not the county.
Request information: Contact the foreclosing attorney to ask if surplus funds exist and how much remains after paying sale costs, attorney’s fees, the secured debt, and any junior liens.
Monitor court filings: Surplus funds are often interplead (deposited) into the superior court of the county where the sale occurred, especially if there are competing claims. Check with the superior court for any filings related to your property.
File a claim or response: If funds are in court, you may need to file a formal claim or response to the interpleader action. If funds are still with the attorney, follow their process for submitting a claim.
Act promptly: These funds do not sit indefinitely. Waiting can limit your ability to recover any surplus, especially if other parties (like junior lienholders) assert claims or if the court distributes the funds.
Consider legal guidance: The process can be complex, especially if there are multiple liens or disputes. Consulting a real estate attorney can help protect your interests.
Example
Illustrative Example:
Suppose your Georgia home was sold at a nonjudicial foreclosure sale on the first Tuesday of the month. The winning bid was $250,000. After paying $10,000 in sale costs and attorney’s fees, and $200,000 to the lender for the mortgage, $40,000 remains. There is a junior lienholder with a $15,000 claim. The foreclosing attorney holds the $40,000 surplus. The attorney pays the junior lienholder first, then the remaining $25,000 is available for the former owner—if you act to claim it before the funds are distributed or the court closes the matter.
Tip: Always confirm with the foreclosing attorney and the superior court whether surplus funds are available and what steps are required to claim them.
Common pitfalls
- Assuming the county holds the funds: In Georgia, the foreclosing attorney—not the county—holds surplus funds.
- Missing the first Tuesday sale date: Not realizing that sales happen on the first Tuesday can cause confusion about timing and deadlines.
- Waiting too long: Surplus funds do not remain available forever. Delays can result in the funds being distributed to other parties or the court closing the case.
- Ignoring junior liens: Junior lienholders are paid before the former owner. Failing to account for these can lead to unexpected outcomes.
- Not monitoring court filings: If the funds are interplead into superior court, missing a required response can forfeit your rights.
- Confusing with other types of sales: Georgia’s nonjudicial foreclosure process is different from other property sales, and the rules for surplus funds are unique.
Summary
- Georgia is a nonjudicial foreclosure state—no court judgment is needed for the lender to sell.
- Foreclosure sales are held on the first Tuesday of the month at the county courthouse steps.
- Surplus funds are held by the foreclosing attorney, not the county, and are often interplead into the superior court.
- Funds are distributed in order: sale costs and attorney’s fees, secured debt, junior lienholders, then the former owner.
- These funds do not sit indefinitely—waiting reduces your options. Next steps:
- Contact the foreclosing attorney and the superior court in the county where the sale occurred to check for surplus funds.
- Consult a qualified real estate attorney to help you navigate the claim process and protect your interests.
This page provides general information and does not create an attorney-client relationship.
Important information
Attorney advertising. Responsible attorney: Christian Cruz, Esq., Georgia Bar Number 238836. Office: CRUZ LAW FIRM, 160 W Camino Real, 589, Boca Raton, FL, 33432.
This page is general information about Georgia law, not legal advice. Reading it does not create an attorney-client relationship, and no such relationship is formed until we have a signed written agreement.
Fee arrangements depend on the posture of the matter and are set out in a written agreement before any work begins. We are glad to explain how fees would work in your situation when we speak.
FAQ
Who holds surplus funds after a Georgia foreclosure?
The foreclosing attorney holds surplus funds after a Georgia nonjudicial foreclosure, not the county. These funds may be deposited into the superior court if there are competing claims.
How are surplus funds distributed in Georgia?
Funds are distributed in this order: sale costs and attorney’s fees, the secured debt, junior lienholders by priority, and finally the former owner.
Is there a deadline to claim surplus funds after foreclosure in Georgia?
There is no fixed statutory deadline, but surplus funds do not remain available indefinitely. Waiting can limit your options or result in the funds being distributed to others.
What is a nonjudicial foreclosure in Georgia?
A nonjudicial foreclosure means the lender can sell the property without a court judgment. In Georgia, these sales happen on the first Tuesday of the month at the county courthouse steps.
What should I do if I think surplus funds are available?
Contact the foreclosing attorney and the superior court in the county where the sale occurred to confirm if surplus funds exist and learn how to claim them.