How Can a Former Spouse or Survivor Assert Entitlement to Surplus Funds Following the Owner’s Death or Divorce?

Detailed Answer

Surplus funds arise when a foreclosure or tax sale produces more proceeds than the amount owed on the property. In Mississippi, the surplus sits with the Chancery Clerk or Tax Collector until a valid claimant emerges. A former spouse or a survivor (heir or devisee) may qualify if they held an interest in the property at the time of sale or pursuant to a divorce decree or will.

1. Identify the Type of Sale

• Foreclosure under a deed of trust: Surplus proceeds deposit with the Chancery Clerk under Mississippi Code §89-5-23. (See: https://law.justia.com/codes/mississippi/2013/title-89/chapter-5/section-89-5-23/)
• Tax sale: Surplus proceeds deposit with the Tax Collector under Mississippi Code §27-45-55. (See: https://law.justia.com/codes/mississippi/2013/title-27/chapter-45/section-27-45-55/)

2. Establish Your Legal Interest

• Former Spouse: You must show you held an interest in the property at the time of the sale or that your divorce decree reserved rights to sale proceeds. A copy of the Final Judgment of Divorce, recorded in the county land records, is essential.
• Survivor (Heir/Devisee): You must be an heir at law or a devisee under a will. Obtain and file a certified copy of the Death Certificate and Letters Testamentary or Letters of Administration from the Probate Court.

3. File a Claim with the Appropriate Court

• Venue: File in the Chancery Court where the foreclosure occurred for deed-of-trust sales, or in the Tax Collector’s office for tax sales.
• Method: Prepare and file a petition or motion captioned “Petition to Claim Surplus Proceeds,” attaching proof of your interest (decree, death certificate, probate papers).
• Notice: Mississippi Rule of Civil Procedure 5 requires service on parties of record, including the successful bidder at sale and lienholders.

4. Observe Statutory Deadlines

• Foreclosure Surplus: You must claim within three (3) years of the sale date, per Mississippi Code §11-1-3 (three-year statute of limitations for actions “upon a statute”).
• Tax Sale Surplus: You must claim within ten (10) years of the sale date, per Mississippi Code §11-1-63 (10-year limitation on actions “for any penalty or forfeiture”).

5. Obtain a Hearing and Court Order

• The court will schedule a hearing. Attend with originals of all documentation proving your interest.
• If the court finds you entitled, it will issue an order directing disbursement of the funds from the Clerk or Tax Collector to you or your estate.

Helpful Hints

Verify the exact sale date and document number in the sale docket.
Order a certified copy of the foreclosure or tax sale deed from the Chancery Clerk.
Record all orders and judgments in the county land records to prevent competing claims.
Consult a probate attorney if you are handling an estate under Mississippi’s Uniform Probate Code.
Mail filings via certified mail, return receipt requested, to establish proof of service.
Keep a detailed index of all pleadings, orders, and correspondence.
Check local court rules for any additional filing fees or form requirements.