Detailed Answer

Short overview: After a foreclosure sale in Alabama, sale proceeds that exceed the amounts owed (the “surplus” or “overage”) belong to parties with legal priority — typically the former owner first, then junior lienholders. Recovering surplus funds requires filing a court proceeding in the county where the foreclosure sale occurred, giving notice to interested parties, proving your entitlement, and obtaining a court order directing the sheriff or foreclosure officer to pay you.

Step-by-step process to file a special proceeding to recover surplus funds in Alabama

Confirm there actually is a surplus.

Obtain the foreclosure sale report or confirmation from the sheriff or the court clerk. The confirmation will show the sale price, amounts paid to the foreclosing creditor, and whether any funds remain. Contact the sheriff’s office or the clerk of court in the county where the sale occurred to request this information.
Identify who has priority to the surplus.

Under Alabama law, surplus funds are distributed according to statutory and equitable priority: the former owner generally has first claim to surplus after valid liens and costs are paid, and junior lienholders follow in order of priority. Make a list of potential claimants (former owner, junior lienholders, judgment creditors) and gather documents proving your position (deed, payoff statements, release of lien, judgment docket, etc.). For general statutory authority on property and foreclosure procedures, see the Code of Alabama (Title 35 – Property) at the Alabama Legislature site: https://www.legislature.state.al.us/.
Decide the correct procedural vehicle and court.

Claims to surplus funds are typically handled by filing a petition (sometimes called a petition in a special proceeding or an interpleader/claim petition) in the circuit court in the county where the foreclosure sale occurred. The exact title of the pleading may vary by county and by whether the sheriff or the foreclosing plaintiff is the party holding the funds. Check local court rules and the circuit court clerk for specific filing requirements. The Alabama Judicial Branch site can help locate local rules and clerk contact information: https://judicial.alabama.gov/.
Prepare the petition or complaint.

Your pleading should explain who you are, why you claim the surplus, identify the foreclosure case and sale date, state the amount of surplus (if known), list other potential claimants, and request that the court determine entitlement and order payment. Attach supporting exhibits: the foreclosure sale record, deed of trust or mortgage, payoff statements, lien releases, proof of identity or ownership, and any title documents. Be clear about the amount you seek and your legal basis for that entitlement.
File the petition and pay filing fees.

File the petition with the circuit court clerk in the county where the foreclosure sale occurred. You will pay the court’s filing fee and any required sheriff’s or publication costs. If you cannot afford fees, ask the clerk about filing a pauper application (in forma pauperis) or fee waiver — eligibility is limited.
Serve notice on all interested parties.

After filing, serve all parties who may have a claim — including the foreclosing plaintiff, the sheriff or sale officer, junior lienholders listed in the foreclosure record, and the former owner (if you are a junior claimant). Service typically follows Alabama civil procedure rules and may require personal service or certified mail depending on local practice. The court will require proof of service (return of service) before hearing the claim.
Respond to competing claims and attend the hearing.

If other claimants file competing petitions, the court will set a hearing (or consolidate pleadings) to determine priorities. Bring originals and certified copies of all documents proving priority and amount due. Be prepared to explain why you are entitled to the funds and to respond to other parties’ evidence. The judge will enter an order allocating the surplus according to legal priority.
Obtain judgment and collect funds.

After the court issues an order awarding you a portion (or all) of the surplus, present the order to the sheriff or the court clerk (per the order’s directions). The sheriff or disbursing officer will pay according to the order; you may need to provide identification or an endorsed release. If the sheriff resists payment, the court’s judgment is enforceable as any money judgment.
Record releases and clear title, if applicable.

Once you receive surplus funds and any liens are satisfied, record releases or satisfaction instruments with the probate or county recorder’s office as needed to clear title.

Common documents and evidence to gather

Foreclosure complaint and final judgment of foreclosure (from the foreclosure case file)
Sheriff’s sale report or receipt showing sale price and disbursements
Deed of trust / mortgage and any recorded liens
Payoff statements and closing statements
Title documents showing ownership at time of sale
ID and proof of authority (if claiming on behalf of an entity or via power of attorney)

Helpful Hints

Start early: deadlines and local practices vary. Missing a deadline or failing to serve a claimant can bar recovery. If you are unsure about timing, contact the circuit court clerk promptly.
Check competing claims: junior lienholders and taxing authorities may assert claims to surplus funds. Compile lien and tax records before filing.
Use the right court: surplus proceedings are usually in the circuit court where the foreclosure judgment was entered. Confirm with the clerk.
Proof matters: courts rely on documentary proof. Present clear records tying you to the property or lien and showing amounts owed.
Consider an attorney: contested surplus claims can be complex. An attorney can draft pleadings, handle service, and present evidence at hearing. If you cannot afford one, ask the clerk about legal aid resources in Alabama.
Watch administrative requirements: some counties require local forms, additional filings, or specific notice language. Contact the circuit court clerk for county-specific guidance.
Keep records of all communications and receipts from the sheriff, clerk, and other parties to avoid disputes during payment.

Where to find Alabama statutory and court resources

Alabama Legislature (Code of Alabama, rules and statutes): https://www.legislature.state.al.us/
Alabama Judicial Branch (court rules, clerk contact information, local procedures): https://judicial.alabama.gov/
Local circuit court clerk’s office (county-level filings, fee schedules, and forms): contact via the Alabama Judicial Branch website above.

Important: This article explains typical steps and practical tips about recovering foreclosure surplus funds in Alabama. It is educational only and is not legal advice. Laws and local court practices change. For a full assessment of your rights and precise procedural requirements, consult a licensed attorney in Alabama or contact the circuit court clerk where the foreclosure sale occurred.