Disclaimer: This article provides general information only and is not legal advice. You should consult a qualified attorney to discuss your specific situation.
Detailed Answer
In Alabama, a successful foreclosure sale may generate surplus funds when the sale price exceeds the total debt, accrued interest, and sale costs. Claiming those funds requires a formal petition in the circuit court of the county where the property sits. Below are the key steps to guide you through the process.
1. Confirm the Existence of Surplus Funds
After the sheriff’s sale, the purchaser pays the purchase price to the circuit clerk. Under Ala. Code § 35-10-17(c) (see https://law.justia.com/codes/alabama/2012/title-35/chapter-10/section-35-10-17/), the clerk holds any surplus during the statutory redemption period. Once redemption expires, unclaimed surplus remains with the clerk until distributed by court order.
2. Gather Supporting Documents
- Foreclosure judgment or decree.
- Sheriff’s sale certificate or deed.
- Proof of payment and accounting from the clerk.
- Title records showing your interest in the property.
3. Draft the Petition
Your petition should include:
- Caption and venue: Circuit Court of [County] in Alabama, per Ala. Code § 12-2-7.
- Identification of the case number and foreclosure parties.
- Statement of facts: date of sale, sale price, debt amount, surplus amount.
- Legal basis: entitlement under Ala. Code § 35-10-21 (see https://law.justia.com/codes/alabama/2012/title-35/chapter-10/section-35-10-21/).
- Prayer for relief: order directing the clerk to pay you the surplus.
4. File and Serve the Petition
File your petition and required attachments with the circuit clerk. Pay any filing fees. Serve copies on all parties of record, including the former mortgagee or trustee. Service typically follows the Alabama Rules of Civil Procedure, Rule 4.
5. Attend the Hearing and Obtain an Order
The court sets a hearing date to review your petition. Present your documentation and any testimony. If the court is satisfied that you hold a valid claim, it will issue an order directing the clerk to release surplus funds to you.
6. Collect Your Funds
Take a certified copy of the court’s order to the circuit clerk’s office. The clerk will disburse the surplus funds by check made payable to you.
Helpful Hints
- Verify deadlines: File promptly after redemption expires to avoid claims by other parties.
- Contact the circuit clerk’s office early to learn local fee schedules and procedures.
- Keep certified copies of all court orders and sale documents.
- Review Alabama Rules of Civil Procedure for service requirements under Rule 4.
- Consider consulting an attorney if multiple claimants dispute the surplus.