How to File a Special Proceeding to Recover Foreclosure Surplus Funds in Maine

Detailed answer — step-by-step guide to recovering foreclosure surplus funds in Maine

When a foreclosure sale brings in more money than the total debt, costs, and fees, the extra money (the surplus) may belong to the former homeowner or to junior lienholders. In Maine, you must ask a court to order distribution of those surplus funds. Below is a practical, step-by-step guide to the common process used in Maine. This explains what you will typically need to do, the documents you will need to gather, and how the court usually resolves competing claims.

1. Confirm that surplus funds exist and who holds them

First, confirm the existence and amount of surplus funds. Check the foreclosure sale records at the county clerk’s or sheriff’s office and at the county registry of deeds. The sheriff’s return or the foreclosure sale report usually lists sale proceeds and how the sale funds were applied. If a surplus exists, those funds are often held by the sheriff, the foreclosure trustee, or the county clerk pending court order.

2. Identify likely claimants and priority

Typical claimants are the former owner (mortgagor) and any junior lienholders (second mortgages, judgment creditors, tax liens, etc.). Priority generally follows the order of recordation: earlier-recorded liens get priority over later-recorded liens. The court will evaluate each claimant’s documentary proof and the recording dates to decide entitlement.

3. Gather documentation you will attach to your petition

Collect clear, certified or certified-true copies of the following:

• The foreclosure judgment or decree;
• The sheriff’s return of sale and any accounting of sale proceeds;
• The deed from the foreclosure sale (or trustee’s deed);
• Your recorded mortgage or lien documents (if you are a claimant);
• Records showing any payments you made or the amounts you claim (for the former owner or lienholders);
• Valid government ID and proof of your ownership interest or lien (for individuals); and
• Any notices previously sent or received about the surplus.

4. Prepare and file the special proceeding (petition)

You will typically open a special proceeding in the civil docket of the county where the foreclosed property is located. The petition should state clearly:

• Your name and contact information;
• The party who currently holds the surplus funds (e.g., sheriff or county);
• The property’s address and the foreclosure case number;
• The amount of surplus funds you seek and how you calculated that amount;
• The legal basis for your claim (for example, former owner entitled to excess after satisfaction of mortgage debt); and
• The relief you request (an order directing the holder to pay you the surplus or to apportion funds among claimants).

Attach the documents you gathered. File the petition with the county clerk and pay the required filing fee. Each county in Maine sets its own small administrative fees; check the county clerk’s fee schedule.

5. Serve all interested parties and follow notice requirements

Serve the petition and notice of the hearing on the holder of the funds (sheriff or county), the foreclosing plaintiff, the former owner, and any known junior lienholders. If some lienholders are unknown or cannot be located after reasonable effort, the court may allow service by publication. Follow Maine civil procedure and local rules for service methods and timing.

6. Attend the hearing and present proof

At the scheduled hearing, each claimant may present evidence and argument. The court will consider the foreclosure record, the order of lien priorities, and documentation supporting each claim. The judge can order distribution of funds according to entitlement, order payment into court pending resolution, or appoint a receiver to hold funds while disputes resolve.

7. Obtain and enforce the court order

If the court orders payment to you, the holder (for example, the sheriff or county treasurer) will disburse funds according to the judgment. If a party fails to comply, you can ask the court for enforcement remedies such as contempt, garnishment, or an execution.

Time sensitivity and statutes

Act promptly. The court’s willingness to treat claims can depend on whether the funds already moved and how long the holder has held them. For general statutory guidance about foreclosure procedure in Maine, see the Maine Revised Statutes, Title 14 (Courts and Civil Procedure): https://legislature.maine.gov/statutes/14/. Also check local court rules at the Maine Judicial Branch: https://www.courts.maine.gov/rules_adminorders/rules/index.html. These sources govern civil filing, service, and many aspects of special proceedings.

Hypothetical example

Suppose a house sold at foreclosure for $300,000. The foreclosing mortgage and sale costs totaled $255,000. That leaves a $45,000 surplus. The sheriff holds the $45,000. The former owner files a petition in the county where the property sits, attaches the foreclosure judgment, the sheriff’s return, and a copy of the recorded mortgage. The former owner serves the sheriff, the foreclosing bank, and any junior lienholders. At the hearing, the court reviews the documents, confirms entitlement, and orders the sheriff to pay the former owner $45,000 minus any valid junior liens the court recognizes.

Practical filing checklist

• Confirm the holder and amount of surplus (county clerk or sheriff).
• Obtain certified copies of the foreclosure judgment and sheriff’s return.
• Collect proof of your ownership or lien and valid ID.
• Draft a clear petition asking the court to distribute the surplus.
• Attach supporting documents and file in the county where the property is located.
• Serve all known interested parties and follow any court-ordered notice methods.
• Attend the hearing prepared to defend your claim with documents and testimony.
• If successful, get a written court order directing disbursement and keep it for enforcement.

Helpful hints

• Start at the county level: contact the county clerk or sheriff to learn who holds the funds and whether any internal claims process exists.
• Get certified copies of foreclosure documents from the court and certified copies of recording history from the registry of deeds.
• List all possible claimants when you file. Omitting a known lienholder risks the court denying relief or reopening the case later.
• If you cannot find a creditor’s address, document your search; you may be allowed to use service by publication or other court-approved methods.
• Be mindful of bankruptcy: if the former owner or a lienholder was in bankruptcy during the foreclosure, consult bankruptcy counsel because that can affect distribution rights.
• Consider a short consultation with a Maine attorney if the amount is significant or if multiple claimants dispute priority. Even a limited-scope consultation can reduce procedural mistakes.
• Keep clear records of every filing, service, and communication with the sheriff, clerk, or other parties.