Detailed Answer
When a property sells in a Vermont foreclosure, the sale may generate surplus funds if the bid exceeds the total debt and costs. You can claim those funds by filing a petition with the Vermont Superior Court under 12 V.S.A. § 4941. Follow these steps to pursue your claim:
1. Confirm the Existence of Surplus Funds
After the foreclosure sale, the court clerk issues a Certificate of Sale and publishes a notice. Review the certificate and published notice to verify whether surplus funds remain. Contact the clerk’s office if you have questions.
2. Determine Your Eligibility
Eligible claimants include:
- The former property owner
- A junior lienholder with a recorded interest
- Any party entitled by contract or court order
You must show a legal interest that gives you rights to any remaining funds.
3. Draft the Verified Petition
Your petition must include:
- A caption naming the case number from the foreclosure action
- A statement identifying the surplus amount
- A description of your interest in the surplus
- Any supporting affidavits or documents, such as a recorded lien or ownership record
- A request for distribution of the funds to you
Label the document “Petition for Distribution of Surplus Funds” and sign under oath.
4. File the Petition with the Superior Court
File your verified petition in the county where the foreclosure occurred. Pay the required filing fee, typically $25–$50. If you cannot afford the fee, you may request a fee waiver.
5. Serve Interested Parties
Serve copies of your petition on all parties who received notice of the foreclosure sale (e.g., the foreclosing creditor, the former owner, and any junior lienholders). Follow Vermont Rule of Civil Procedure 4 for personal or certified mail service.
6. Attend the Hearing
The court may schedule a hearing to resolve competing claims. Bring originals of all evidence, including deeds, mortgages, and affidavits. Be prepared to explain your legal interest and the surplus calculation.
7. Obtain and Enforce the Court’s Order
If the court grants your petition under 12 V.S.A. § 4941 (Distribution of proceeds), it will issue an order directing the clerk to distribute the funds to you. Coordinate with the clerk’s office to receive payment, which may be issued by check.
Helpful Hints
- Check the foreclosure sale notice for any deadlines to file claims.
- Gather title documents early to prove your interest.
- Keep copies of all filings and proof of service.
- Confirm the exact surplus amount with the court clerk.
- Consider hiring an attorney if multiple parties contest the surplus.