Disclaimer: This information is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for advice on your specific situation.
Detailed Answer
When a foreclosure or sheriff’s sale generates surplus funds, Alaska law requires the court to distribute the excess to claimants with valid liens or judgments. To determine whether other creditors or lienholders have claims to the surplus, follow these steps:
- Review Court and Sale Records. Obtain the foreclosure court file or sheriff’s sale record. This will list the plaintiff, defendant, property description, and amounts paid. The clerk’s certificate often notes any recorded liens.
- Conduct a Title Search. Visit the county recorder’s office where the property is located. Search the chain of title and lien indexes for:
- Mortgages and deeds of trust
- Judgment liens
- Mechanics’ liens (see AS 34.35.020)
- Property tax liens
- Check UCC Filings. The Alaska Department of Commerce, Community, and Economic Development maintains UCC financing statements. Search for any security interests filed against the debtor or the property (AS 45.09.020).
- Verify Federal Liens. Check the IRS and other federal agencies (e.g., USDA) for tax liens. Use the IRS’s Tax Lien Search or contact the local IRS office.
- Identify Statutory Deadlines. Under AS 09.45.245(d), creditors with recorded liens must file a verified claim for surplus within 60 days after the sale proceeds are deposited with the court. Failure to file within this period generally bars the claim.
- Review Statutory Distribution Priorities. Alaska distributes surplus funds in the following priority order (AS 09.45.245):
- Costs of sale and court fees
- Senior mortgages and trust deeds
- Junior mortgages and trust deeds
- Judgment liens and other recorded liens
- Any remaining balance returned to the former owner
- Obtain certified copies of all recorded liens before filing your claim.
- Use an online title plant or engage a title company for comprehensive lien searches.
- Keep an eye on the 60-day deadline in AS 09.45.245(d); courts strictly enforce it.
- Consider ordering a certified copy of the sale clerk’s certificate to confirm deposit dates.
- If you discover unrecorded agreements, consult an attorney to determine if equitable principles could apply.
- File your claim in the same court that conducted the sale to avoid jurisdictional issues.
- Maintain proof of service when notifying other lienholders of your claim.
By cross-referencing recorded documents with statutory timelines, you can confirm which creditors hold valid claims. If multiple creditors file timely claims, the court allocates the surplus in priority order.