Disclaimer: This article is for educational purposes only. It does not constitute legal advice. Consult a licensed attorney in your jurisdiction for advice on your situation.
Detailed Answer
1. Confirm the Existence and Amount of Surplus Funds
After a foreclosure sale, any bid amount that exceeds the total debt, costs, and fees creates a surplus. Contact the county clerk’s or public trustee’s office where the sale occurred to verify that surplus funds remain. Review the sale docket and the clerk’s registry to learn the exact surplus amount.
2. Identify the Statutory Authority and Time Limits
Colorado law governs surplus-claim petitions under C.R.S. § 38-38-302 and C.R.S. § 38-38-303. Under § 38-38-302(8), the clerk must mail notice of available surplus funds to the former owner and any junior lienholders. Once mailed, you typically have six months to file your petition. If no petition is timely filed, unclaimed funds are transferred to the Colorado Unclaimed Property Trust Fund.
3. Gather Required Documentation
- Certified copy of the trustee’s deed or sale certificate.
- Foreclosure sale records showing sale date and amount.
- Proof of identity or, if representing an entity, proof of authority.
- Any documentation proving your right to the surplus (e.g., payoff statements, junior lien documents).
4. Draft and Prepare the Petition
Your petition should be titled “Petition for Distribution of Surplus Funds” and include:
- The court’s name and case number of the foreclosure action.
- A clear statement of your interest (former owner, junior lienholder, heir).
- Factual background: date of sale, sale price, total debt satisfied, and surplus amount.
- A request for the court to enter an order directing the clerk to pay you the surplus funds.
- A certificate of service showing how you will notify interested parties.
5. File the Petition and Pay Fees
File your petition in the district court in the county where the foreclosure sale occurred. Pay the applicable filing fee (check the local court’s fee schedule). If fees are a barrier, inquire about a fee waiver or deposit order.
6. Serve Notice on Interested Parties
Serve the petition and a court-signed summons on the public trustee or foreclosure trustee and any known junior lienholders, as required by Colorado Rule of Civil Procedure 4. Success in your petition depends on proper service and adherence to deadlines.
7. Attend the Hearing or Seek Default Relief
The court may schedule a short hearing. If all parties default or do not contest, you can file for a default order. Present your documentation to demonstrate entitlement to the surplus.
8. Obtain and Enforce the Court’s Distribution Order
Once the court issues its order, take the signed order to the county clerk’s office. The clerk will disburse the funds in accordance with the order. Verify payment procedures and any additional requirements, such as a valid identification check.
Helpful Hints
- Track all deadlines: missing the six-month window can forfeit your claim.
- Maintain organized copies of every filed document and proof of service.
- Confirm the statutory citation and links at Colorado General Assembly.
- Consult the court clerk for fee schedules, filing procedures, and local rules.
- If in doubt, seek guidance from a Colorado-licensed attorney experienced in foreclosure or real estate matters.