How can a former spouse or survivor assert entitlement to surplus funds following the owner’s death or divorce?
Detailed Answer
When a property owner’s real estate sells at a foreclosure or tax-sale, any amount collected above the total debt and sale expenses becomes “surplus funds.” Illinois law provides a process for interested parties—including former spouses and survivors—to claim those funds. Below is an overview of the required steps and statutory authority under Illinois law.
1. Confirm Sale Details and Surplus Amount
• Locate the foreclosure or tax-sale case number through the county circuit clerk’s office.
• Review the clerk’s ledger or public index to verify the surplus amount and sale date. Surplus funds generally arise once the redemption period ends.
2. Determine Your Legal Status
• Survivor: If the owner died, only the personal representative or heirs can claim money. You must have Letters of Office appointing you as executor or administrator.
• Former Spouse: If a divorce judgment awarded you an interest in the property or its proceeds, secure a certified copy of the judgment and property-distribution order.
3. File a Petition for Distribution of Surplus
Under 735 ILCS 5/15-1502, any party with an interest in the surplus must petition the circuit court that conducted the sale.
- Venue: File in the same county and court where the foreclosure occurred.
- Time Limit: File within one year after the date of sale unless the court grants an extension for good cause.
- Content: State your interest, attach supporting documents (death certificate, Letters of Office, divorce decree, settlement agreement, marriage certificate).
Link to statute: 735 ILCS 5/15-1502.
4. Serve Notice on Other Interested Parties
After filing, serve all known claimants and lienholders (e.g., mortgagee, taxing bodies). Illinois Supreme Court Rule 11 governs service in circuit-court proceedings.
5. Attend the Court Hearing and Obtain an Order
The court evaluates competing claims and issues an order directing the county clerk to distribute funds. If no objections arise, the judge may enter an uncontested order.
6. Collect the Funds
Present the certified court order to the county clerk. The clerk will disburse checks to approved claimants.
Helpful Hints
- Start Early: Collect documents and confirm deadlines to avoid missing the one-year statutory window.
- Verify Documents: Make sure all certificates (death, marriage, divorce) are certified and up to date.
- Consult the County Clerk: Many clerks publish online indexes of surplus funds and instructions for petition filings.
- Consider Legal Advice: While this guide educates, an attorney can help navigate complex disputes or competing claims.
- Keep Records: Maintain copies of all pleadings, service receipts, and court orders until distribution completes.