Detailed Answer
This article explains how a former homeowner or other interested party in Arkansas can petition the court for surplus funds following a foreclosure sale. Surplus funds are the money remaining after all valid liens, costs, and expenses have been paid out of the foreclosure sale proceeds. Under Arkansas law, these funds belong to the party entitled to them—often the original mortgagor or junior lienholder.
1. Confirm Your Eligibility
First, determine whether you qualify to claim the surplus. Generally, eligible claimants include:
- The original homeowner (mortgagor) whose debt has been overpaid.
- Junior lienholders whose lien was extinguished but not fully covered.
Arkansas Code § 18-50-110 sets a two-year statute of limitations: you must file your petition within two years after the foreclosure sale date. See Ark. Code Ann. § 18-50-110 (https://law.justia.com/codes/arkansas/2019/title-18/subtitle-3/chapter-50/subchapter-1/section-18-50-110).
2. Gather Necessary Documentation
- Foreclosure sale details: date, property description, and book/page where sale was recorded.
- Proof of your interest: deed, mortgage, or lien documents showing your right to the surplus.
- Accounting of sale proceeds and lien payoffs (often available from the circuit clerk or sheriff’s office).
3. Prepare and File Your Petition
File a petition in the circuit court in the county where the foreclosure sale occurred. Your petition should include:
- Party information (name and address of petitioner and respondent, usually the foreclosure purchaser or county sheriff).
- A clear statement of facts showing the foreclosure sale details and the surplus calculation.
- A request for an order directing disbursement of the surplus funds to you.
Pay the applicable filing fee (varies by county). The circuit clerk will assign a case number and schedule a hearing.
4. Serve All Interested Parties
Arkansas rules require you to serve notice on all parties with an interest in the property or surplus—typically the foreclosure purchaser, junior lienholders, and the sheriff or circuit clerk holding the funds. Service must comply with Ark. R. Civ. P. 4, usually via certified mail or personal delivery.
5. Attend the Hearing and Obtain an Order
At the hearing, present your documentation to show you are entitled to the funds. If the court is satisfied, it will issue an order directing the county clerk or sheriff to pay you the surplus. Once entered, the clerk will disburse the funds.
Disclaimer: This information is for educational purposes only and does not constitute legal advice. Consult an attorney for guidance on your specific situation.
Helpful Hints
- File as soon as possible. The two-year deadline is strict.
- Request a certified record of sale proceeds from the circuit clerk early in the process.
- Double-check service requirements under Ark. R. Civ. P. 4 to avoid delays.
- Keep copies of all filings and proof of service in your case file.
- Consider a free or low-cost legal clinic if you face challenges preparing court documents.