Detailed Answer
When a property sells at a Louisiana sheriff’s sale for more than the debt, interest, and costs, the excess becomes “surplus funds.” Louisiana Code of Civil Procedure article 2369 explains how the court handles that surplus. To recover your share, follow these steps:
1. Confirm the surplus deposit
After sale, the sheriff must deposit any excess with the clerk of court. See La. C.C.P. art. 2369.
2. Note the claiming deadline
The clerk holds surplus funds for one year from the date of deposit. If no one claims the money in that period, the funds may escheat to the state treasury under Louisiana’s Unclaimed Property Law.
3. Draft your petition
Prepare a petition (often a “Rule to Show Cause”) in the same district court that ordered the sale. Include:
- The original foreclosure case number and court.
- Date of the sheriff’s sale and amount of the sale proceeds.
- Your identity and legal basis for claiming surplus (e.g., prior mortgagee, judgment creditor, owner).
- Statement that you request an order directing the clerk to pay you the surplus funds.
4. File and serve the petition
Submit your petition and pay the filing fee at the clerk’s office where the sale occurred. Serve a copy on the foreclosing creditor (mortgagee), any known lienholders, and other interested parties according to the Louisiana Code of Civil Procedure.
5. Attend the hearing
The court will set a hearing on your rule to show cause. Appear with evidence of your entitlement, such as mortgage assignments, judgment records, or title documents.
6. Obtain judgment and disbursement
If the judge finds you entitled, the court issues a judgment ordering the clerk to pay you from the registry. The clerk will then issue you a check for the awarded amount.
Disclaimer: This information is for educational purposes only. It does not constitute legal advice. Always consult a qualified attorney about your specific situation.
Helpful Hints
- Gather all foreclosure sale paperwork before you file.
- Verify the exact deposit date with the clerk to track your one-year deadline.
- Identify all possible claimants—creditors, prior owners, and heirs.
- Provide clear proof of your interest in the surplus (assignments, judgments, wills).
- Maintain organized service records to show proper notice.
- Consider hiring an attorney if multiple claimants contest the surplus.