Detailed Answer
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney about your specific situation.
When a foreclosure sale in Indiana produces funds in excess of the total debt, the former owner and other parties with a legal interest may petition the court for those surplus proceeds. Below are the general steps under Indiana law:
- Verify Eligibility and Amount of Surplus. Contact the county clerk’s office where the foreclosure occurred. Request a record of sale proceeds and any distribution order. Confirm the amount of funds remaining after satisfaction of the mortgage, interest, fees, and costs.
- Identify Interested Parties. Typical claimants include the former homeowner (judgment debtor), junior lienholders, or parties with recorded interests. Indiana Code § 32-29-7-10 governs distribution priorities. See Indiana Code § 32-29-7-10.
- Prepare Your Petition. Draft a petition to the court that handled the foreclosure. Include:
- Case number, court name, and sale date
- Amount of surplus funds claimed
- Your relationship or interest in the property
- Evidence of your interest (e.g., recorded lien, deed records)
- File the Petition. Submit the petition with the clerk of the court where the foreclosure was adjudicated. Indiana courts typically require a filing fee—check the local fee schedule or county website.
- Serve Notice on All Parties. Under Indiana Code § 32-29-7-11, you must serve the petition on the mortgagee, junior lienholders, and any other interested parties. Proof of service must be filed with the court. See Indiana Code § 32-29-7-11.
- Attend Any Hearing. If an interested party objects, the court will set a hearing. Prepare to present evidence of your interest and the calculation of the surplus amount.
- Obtain Court Order and Disbursement. If the court grants your petition, it will issue an order directing the clerk to disburse the surplus funds to you. The clerk then cuts a check or issues payment according to the court’s instructions.
Helpful Hints
- Early Contact: Call the county clerk before preparing your petition to confirm deadlines and local procedures.
- Documentation: Attach certified copies of deeds or lien instruments to prove your claim.
- Service Rules: Follow Indiana Trial Rule 5 regarding service by certified mail or personal delivery.
- Deadlines: File within one year of the sale date to avoid forfeiting your right to surplus funds.
- Professional Review: Have a lawyer or title professional review your petition for completeness and accuracy.