Disclaimer: This information is for educational purposes only and does not constitute legal advice. Consult a licensed attorney in Kentucky for case-specific guidance.
Detailed Answer
When a judicial foreclosure sale in Kentucky produces funds exceeding the debt, costs, and liens, the clerk holds the surplus. Under KRS 426.505, these funds remain with the court until a proper claimant petitions for release. Follow these steps to file your petition and claim those surplus funds.
1. Determine Your Eligibility
Eligible claimants include the former property owner, junior lienholders or other parties with an interest in the property. Anyone who claims that the foreclosure sale generated money beyond what’s owed may file a petition.
2. Contact the County Clerk’s Office
Visit the clerk’s office in the circuit where the foreclosure occurred. Ask whether the sale produced a surplus and request the foreclosure case file number. Many clerks maintain a register of unclaimed surpluses.
3. Gather Required Documentation
- Proof of identity (driver’s license or state ID).
- Documentation supporting your interest (deed, mortgage or lien instrument).
- Foreclosure sale confirmation and sale date.
- Any prior correspondence with the clerk regarding the sale.
4. Draft and Format Your Petition
Create a written petition titled “Petition for Distribution of Surplus Funds.” Include:
- Case caption (court name, case number, parties).
- Statement of your legal interest.
- Amount of surplus claimed.
- Reference to KRS 426.505.
- Signature and contact information.
5. File the Petition
Submit your petition and supporting documents to the circuit court clerk’s office. Pay any required filing fee. The clerk will assign a hearing date and notify interested parties.
6. Serve Notice on Interested Parties
Serve the petition on the foreclosure purchaser, mortgagee, or other lienholders in accordance with the Kentucky Rules of Civil Procedure. Proof of service must be filed before your hearing.
7. Attend the Court Hearing
Appear on the scheduled date. Present evidence of your entitlement. If the court approves your petition, it will order the clerk to distribute the funds to you.
Helpful Hints
- Double-check your petition for accuracy before filing.
- Keep copies of all documents and proof of service.
- Check deadlines: Kentucky does not set a specific statute of limitations for surplus claims, but delay may jeopardize recovery.
- If multiple parties claim the same surplus, the court will determine priority based on lien dates.
- Consider consulting a Kentucky attorney for complex or disputed claims.