How to File a Motion to Claim Surplus Funds After a Foreclosure in Alabama

This FAQ-style guide explains, in plain language, the typical steps someone in Alabama should take when they believe they are entitled to surplus money remaining after a foreclosure sale of a relative’s property. This article assumes the homeowner (your mom) is deceased and you are trying to recover any surplus sale proceeds. This is educational information only and not legal advice. For binding legal guidance, consult a licensed Alabama attorney.

Detailed Answer — Steps to file a motion to determine your right to surplus funds

When a foreclosure sale produces more money than is needed to pay the mortgage, fees, and prior liens, the remaining amount (the surplus) may belong to the former owner or the owner’s estate. In Alabama the specific procedures depend on whether the foreclosure was judicial or non‑judicial (power of sale) and on any competing claims (other liens, taxes, or creditors). Below are the practical steps to locate, document, and ask the court to award the surplus to you or the estate.

Confirm whether a surplus exists and who holds it. Obtain the foreclosure sale documents and the sale accounting. If the sale was judicial, the circuit court where the foreclosure case was heard will have the file and the court clerk or a commissioner may hold surplus funds. If the sale was non‑judicial (trustee or power‑of‑sale), the foreclosure trustee, purchaser, or county official may hold the proceeds until claims are resolved. Start by contacting the county circuit court clerk and the clerk of the foreclosure case to request the case file and any accounting or distribution records.
Identify the correct court and case number. If a foreclosure case number exists (judicial foreclosure), you must file your motion in that same circuit court. If the sale was by power of sale and there was no pending foreclosure lawsuit, you typically will file a petition in the circuit court of the county where the property was located asking the court to determine rights to the surplus. The court that supervised the sale or where the property is located is generally the right venue.
Gather documents proving your right to the surplus. Typical supporting documents include:

Death certificate for your mom (if deceased).
Proof of your relationship to the deceased (birth certificate, family tree, or other evidence showing heirship).
Will, letters testamentary, letters of administration, or other probate documents if the estate was opened.
Foreclosure sale documents, certificate of sale, deed from the sale, and any accounting or purchaser statements.
Mortgage payoff statements, proof of existing liens, property tax statements.
Photo ID and proof of your address.

Prepare the motion or petition to determine/distribute surplus funds. The document should request the court to: (a) confirm whether a surplus exists and the amount; (b) determine who is legally entitled to the surplus; and (c) order distribution of the funds to the rightful person or the estate. Include a clear statement of facts, attach supporting documents, and state your relationship or legal interest. If you are acting as personal representative of the estate, attach letters testamentary/administration.
File the motion and pay filing fees. File with the circuit court clerk where the foreclosure was handled or where the property sits. Ask the clerk about the local filing fee and whether the court requires a proposed order for the judge. The clerk can also tell you how to schedule a hearing and the service requirements.
Serve notice on interested parties. Proper service is crucial. Serve the motion and any notice of hearing on all parties who might claim the surplus: the foreclosing lender or trustee, the foreclosure purchaser, holders of any recorded liens, the county tax authority, and known heirs or creditors. The court will provide requirements for who must be served and how (personal service, certified mail, or published notice if parties are unknown).
Attend the hearing and present evidence. Bring originals and copies of all documents proving entitlement. Be prepared to explain why you (or the estate) have priority over other claimants. Priority typically follows lien priority and statutory rules; secured creditors, tax liens, and costs of sale are paid first. The court will evaluate competing claims and decide who gets the surplus.
If the court awards the surplus, follow the court’s distribution order. The court’s order will direct the clerk, commissioner, or trustee to disburse the funds. The receiving institution may require an endorsed order, identification, and possibly a probate document if the recipient is the estate.
If the court denies your claim, evaluate appeal or other remedies. You may have the right to appeal or to raise additional evidence if the court denies the motion. Discuss timelines and options with an attorney promptly.

Relevant Alabama statutes and rules (for background): review the Code of Alabama provisions on property, mortgages and foreclosures (Title 35), and probate and administration of estates (Title 43). These laws explain mortgage enforcement, distribution of sale proceeds, and estate administration. See the Code of Alabama Title 35 (Property) and Title 43 (Wills, Decedents’ Estates):

Priority rules and common issues to expect

When the court reviews surplus claims it will typically:

Pay costs of sale and statutory fees first.
Pay prior recorded liens in order of priority (older liens first), including mortgages and judgment liens.
Pay property taxes and tax liens with statutory priority.
Only after these claims are satisfied will any remaining funds be paid to the former owner or the owner’s estate.

Common problems include disputed heirship, other creditors asserting claims, unclear title transfers before the sale, or delays in probate. The court resolves these issues by weighing evidence and applying priority rules.

Helpful Hints

Start with the circuit court clerk in the county where the property was located — ask for the foreclosure file and accounting.
If your mom’s estate was or should be opened, obtain letters of administration or testamentary from probate before asking for distribution.
Keep detailed copies of every recorded document and service receipt; the court relies on records and proof of notice.
If parties are unknown or cannot be found, the court may allow publication of notice — plan for extra time and cost.
Contact the foreclosure purchaser or trustee to ask if they hold the surplus and for a written accounting; sometimes the funds are not yet disbursed because claims are unresolved.
Consider hiring an Alabama attorney experienced in foreclosures or probate — contested surplus cases can involve complex priority and procedural rules.
Act promptly — although specific deadlines vary, waiting can make it harder to locate records and present a timely claim.

Getting help

Because procedures and outcomes depend on the foreclosure type, the county, and the facts of the estate, an Alabama attorney can help draft the motion, identify proper parties for service, and present evidence to the court. If you cannot afford an attorney, contact local legal aid or the Alabama State Bar’s lawyer referral service for resources.

Disclaimer: This article is educational only and is not legal advice. It does not create an attorney‑client relationship. Laws change and each case turns on its specific facts. Consult a licensed Alabama attorney to understand how the law applies to your situation.