Disclaimer: This article provides general information about Vermont foreclosure procedures. It does not constitute legal advice. Consult an attorney for guidance on your specific situation.
Detailed Answer
What Are Surplus Funds?
When a foreclosure sale of real property in Vermont generates proceeds exceeding the total debt—including principal, interest, costs, and fees—the excess amount is called “surplus funds.” These funds belong to the debtor or other parties with a legal claim (e.g., junior lienholders).
Vermont Law on Surplus Funds
Under Vermont law, the clerk of the Superior Court must hold any surplus funds from a foreclosure sale “for the benefit of the debtor or any other person lawfully entitled thereto, subject to the order of the court.” The clerk distributes these funds to entitled parties upon application (12 V.S.A. § 4638).
Steps to Determine if Surplus Funds Remain
- Identify the Case: Obtain the foreclosed property’s address and the Superior Court case or docket number. You may find this on public notices in the local newspaper or on the Vermont Judiciary’s eCourt system.
- Review the Report of Sale: After the sale, the auctioneer or foreclosing creditor must file a Report of Sale with the Superior Court clerk in the county where the property lies. This report lists the sale price and the total debt satisfaction.
- Check Court Records: Visit or contact the Superior Court clerk’s office to review the Report of Sale. If proceeds exceed the debt, the clerk’s file will note surplus funds available under 12 V.S.A. § 4638.
- Contact the Town Clerk or Lister: Some towns record foreclosure sales and fund distributions. Ask the town clerk if they record surplus notifications or can direct you to the court records.
- Search the Judiciary eCourt System: Use https://ecrs.vermont.gov to search dockets by party name or case number. Look for the Report of Sale entry and any subsequent motions or orders for surplus distribution.
- File a Claim (if Surplus Exists): If you believe you have a right to surplus funds, you must petition the Superior Court clerk. Under 12 V.S.A. § 4638, you should file your application promptly, as delays may affect your rights.
Helpful Hints
- Keep all foreclosure notices and the original mortgage or deed of trust on hand when researching surplus.
- Note that junior lienholders must file claims before senior liens to secure surplus rights.
- Track filing deadlines. While Vermont law does not specify a strict deadline for surplus claims, unreasonable delays can lead to complications.
- Consider consulting an attorney if the surplus calculation or chain of title appears complex.
- Use the Vermont Judiciary’s public kiosks for free access to court records if you cannot access eCourt online.