Detailed Answer
When a sheriff’s sale yields surplus funds—money remaining after sale costs and secured debts are paid—Arkansas law requires the officer to hold these funds and distribute them according to statute. Title 18, Chapter 49 of the Arkansas Code governs this process. You can review the full chapter at Ark. Code Ann. § 18-49-101 et seq..
Under Ark. Code Ann. § 18-49-115, any party with a valid lien or judgment recorded before the sale may claim a share of surplus funds, following priority rules: federal liens, property tax liens, then mortgages and judgments in order of recording. To determine if other creditors or lienholders have potential claims, you must conduct a title and lien search in the county where the property is located. This search should include:
- Recorded mortgages and deeds of trust
- Judgment liens docketed in the circuit clerk’s judgment docket
- Mechanic’s and materialman’s liens under Ark. Code Ann. § 18-44-101 et seq.
- Uniform Commercial Code (UCC) financing statements for equipment or personal property liens
- Federal tax liens filed with the IRS and county recorder
After identifying potential claimants, the sheriff or clerk must publish notice of the surplus and mail notice to known lienholders per Ark. Code Ann. § 18-49-107. Creditors generally have 30 days from the date of the last publication to file a written claim with proof of their lien. If a claim is timely and valid, the court apportions the surplus according to lien priority.
Helpful Hints
- Start with the county recorder’s office to pull the property’s full chain of title.
- Request a judgment docket search at the circuit clerk’s office for any recorded judgments.
- Search UCC filings online via the Arkansas Secretary of State’s website.
- Check county tax collector records for unpaid property taxes or tax liens.
- Use a title company or real estate attorney for a comprehensive lien search.
- Mark your calendar for the statutory claim deadline—late filings likely get rejected.
- Document all correspondence and notices related to the surplus funds process.
Disclaimer: This article is for educational purposes and does not constitute legal advice. Consult a qualified attorney about your specific situation.