If your Kentucky home sold at a Master Commissioner’s sale for more than you owed, the extra money is yours. It does not belong to the bank. It does not belong to the state. But it will not come to you on its own. You have to ask the court for it.
These leftover dollars go by several names. You may hear excess funds, surplus funds, unclaimed funds, or excess proceeds. In Louisville, people often call them Master Commissioner surplus funds. They all mean the same thing: the cash left in the Commissioner’s account after every valid claim is paid.
Nick Thompson is one of the few Kentucky attorneys who files the motion that gets this money released. The fee is a flat $1,500, paid up front. You keep the rest.
Why a foreclosure sale leaves money behind
Two things drive most surpluses, and both come back to one statute.
Under KRS 426.530, if a court-ordered sale does not bring two-thirds of the home’s appraised value, the former owner has a right of redemption. That right lasts six months from the sale date. A buyer does not want to hold property that the old owner can take back. So lenders usually bid at least two-thirds of appraised value to cut that right off. If your mortgage balance was well under that bid, the difference is surplus.
The second driver is the kind of case. Not every foreclosure is brought by a mortgage lender. A homeowners association, a condo association, or a tax authority can force a sale over a much smaller debt. In those cases there is no lender bidding the price up to protect itself. The lien being collected may be a few thousand dollars against a home worth far more. Once that small claim is paid, most of the sale price is left over, and it belongs to the former owner.
Who gets the surplus money after a foreclosure sale?
The Master Commissioner pays claims in order. The party that filed the case is paid first, including its debt, interest, court costs, and attorney fees. Next come other lienholders. That can mean a second mortgage, a judgment creditor, unpaid property taxes, or an IRS lien. The Commissioner’s own fees and costs are also deducted.
Whatever remains belongs to the former homeowner. The funds stay subject to creditor claims until they are released, so a lien you did not know about can reduce what you receive.
Why can’t the Commissioner just mail you a check?
The Commissioner is an officer of the court. He or she cannot release money from the court’s account without a signed order from the Circuit Court judge. That rule protects the funds, but it also means the money sits until someone acts.
Getting that order takes two filings. First, a motion for distribution tells the court that all known claims have been paid and asks for the balance. Second, a proposed order directs the Commissioner to pay the remaining proceeds to you. The judge reviews both. If the judge signs, the Commissioner cuts the check.
What a motion for distribution has to show
The motion is short, but the court expects it to cover specific points. The homeowner must confirm that every known claim against the sale proceeds has been paid. The motion must state that no other party is claiming the money. It must also address whether any garnishment or attachment is pending against the funds. Then it asks the Commissioner to verify the balance and release it.
Each statement has to be true and supported by the court file. A second mortgage you forgot about, or a judgment lien you never saw, can stall the motion or draw an objection. This is not a form you fill in and mail. People who try it alone often get no response at all, and they rarely learn why.
If a lienholder does step forward, that claim can be challenged. A licensed attorney can appear in court, dispute an invalid lien, and argue for your share. A recovery company cannot.
How long do you have to claim Kentucky foreclosure unclaimed money?
There are two clocks. The first is practical. The Commissioner pays claims over several months after the sale, so the final balance is not known right away. Once it is, the money is easiest to reach while the Commissioner still holds it.
The second clock is set by law. Under KRS 393A.040, money held by a court may be sent to the Kentucky State Treasurer one year after it becomes distributable. It must be sent no later than five years after that date. Once the Treasurer has it, the funds are held as unclaimed property. You can still claim them, but the claim moves to a state process with its own paperwork and wait times. It is slower, and it is harder to prove.
The simple rule: act while the money is still in Circuit Court, not Frankfort.
The problem with surplus funds recovery companies
Within days of a sale, former homeowners in Louisville start getting calls and texts. The callers found the case on the public docket. They offer to recover your money for you. Many of the contracts we have reviewed take half of the surplus, and some take more. They often will not tell you how much is sitting in the account before you sign.
Here is what that looks like. Say the Commissioner is holding $40,000 for you. A company working on a 50 percent contract keeps $20,000. Our flat fee is $1,500. You keep $38,500.
These companies are not law firms. They cannot file a motion in Circuit Court or speak to the judge. Some hire an attorney to appear for them. Others mail you forms and hope the clerk accepts them. If the funds have already gone to the Treasurer, they may ask you to sign a power of attorney so they can file the state claim in your name.
If you already signed something with one of these companies, do not panic. Bring the paperwork to your consultation. We will read it and tell you what it means for your claim.
Why Nick charges a flat $1,500, paid up front
Nick does not take his fee out of your Commissioner’s check. He charges $1,500 for the motion and order, due before filing. There are three reasons.
First, the check comes to you whole. Second, there is no argument later over what was earned. The price is set before the work starts. Third, you know your net before you decide. On a $12,000 surplus, you keep $10,500. On a $60,000 surplus, you keep $58,500.
The flat fee covers the work in about 95 percent of these cases. That includes drafting the motion and order, filing them, serving the Commissioner and the other parties, and following up until the order is signed. A case that turns into a contested fight over a competing lien takes far more time. If that happens, Nick will tell you what the added work costs before he does it.
Finding out what the Commissioner is holding
The balance is a moving number. The Commissioner keeps paying claims for months after the sale, and the funds remain subject to liens the whole time. Property tax liens and IRS liens are common.
Nick will check the court record and the Commissioner’s figures when he can, and he will tell you what he finds before you hire him. He would rather turn down a case than charge $1,500 to chase a few hundred dollars. Whether the number is worth pursuing is a conversation to have before any money changes hands, not after.
Jefferson Circuit Court and the counties we serve
Most of these cases come out of Jefferson Circuit Court in Louisville. The Jefferson County Master Commissioner conducts the sales and holds the proceeds. We file directly with the court and serve the Commissioner’s office.
The same process applies in Oldham, Bullitt, Spencer, Nelson, and Meade counties. Each Circuit Court has its own Master Commissioner, and the motion goes in the case where your home was sold. These filings rarely require a court appearance, so Nick can handle them in other Kentucky counties on request. Call the office with your county and case number.
If you are still facing a sale, read about the Kentucky commissioner foreclosure sale process before the auction date. If your case has not reached judgment, our page on the Kentucky foreclosure law process explains the steps and your defenses.
Frequently asked questions
How much does it cost to file a motion for distribution of commissioner funds?
Nick Thompson charges a flat $1,500 for the motion and order. It is paid up front, not deducted from your check. That fee covers the work in about 95 percent of cases. Call 502-625-0905 to talk through your case.
Do you handle surplus funds cases outside Jefferson County?
Yes. We regularly file in Jefferson, Oldham, Bullitt, Spencer, Nelson, and Meade counties, and we can handle other Kentucky counties on request. The motion goes in the Circuit Court case where your home was sold. Call 502-625-0905 with your county and case number.
Who gets the surplus if there was a second mortgage?
The second mortgage holder is paid before you, but only if it filed a claim in the case. Tax liens and IRS liens are paid too. Any balance left after all valid liens goes to you. If a lienholder’s claim looks wrong, an attorney can dispute it in court.
Can the Master Commissioner just send me the leftover money?
No. The Commissioner can only pay out on a signed order from the Circuit Court judge. Someone has to file a motion for distribution and a proposed order first. Without that filing, the money sits.
Why did my home sell for about two-thirds of its value?
Under KRS 426.530, a sale below two-thirds of appraised value gives the former owner six months to redeem the property. Lenders usually bid at least that much to cut off the redemption right. When the debt was smaller than the bid, the difference becomes surplus.
I already signed a contract with a recovery company. Can you still help?
Possibly. Bring the contract and anything else you signed to your consultation. We will review what rights, if any, you gave away and tell you what options remain. Do not sign anything else until we have looked at it.
How long before the money goes to the Kentucky State Treasurer?
Under KRS 393A.040, a court may send unclaimed funds to the Treasurer one year after they become distributable, and must do so within five years. You can still claim the money afterward through the Treasurer’s unclaimed property process, but it is slower.
Find out how much the Commissioner is holding for you
If your Kentucky home was sold at a Master Commissioner’s sale, there may be money waiting with your name on it. Do not sign it away to a call center. Call our office at 502-625-0905. We will look at the court record and tell you what we find before you spend a dollar.