What steps are required to file a petition claiming surplus funds from a foreclosure proceeding in Indiana? | Indiana Estate Planning | FastCounsel
IN Indiana

What steps are required to file a petition claiming surplus funds from a foreclosure proceeding in Indiana?

Detailed Answer

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult a qualified attorney about your specific situation.

When a foreclosure sale in Indiana produces funds in excess of the total debt, the former owner and other parties with a legal interest may petition the court for those surplus proceeds. Below are the general steps under Indiana law:

  1. Verify Eligibility and Amount of Surplus. Contact the county clerk’s office where the foreclosure occurred. Request a record of sale proceeds and any distribution order. Confirm the amount of funds remaining after satisfaction of the mortgage, interest, fees, and costs.
  2. Identify Interested Parties. Typical claimants include the former homeowner (judgment debtor), junior lienholders, or parties with recorded interests. Indiana Code § 32-29-7-10 governs distribution priorities. See Indiana Code § 32-29-7-10.
  3. Prepare Your Petition. Draft a petition to the court that handled the foreclosure. Include:
    • Case number, court name, and sale date
    • Amount of surplus funds claimed
    • Your relationship or interest in the property
    • Evidence of your interest (e.g., recorded lien, deed records)
  4. File the Petition. Submit the petition with the clerk of the court where the foreclosure was adjudicated. Indiana courts typically require a filing fee—check the local fee schedule or county website.
  5. Serve Notice on All Parties. Under Indiana Code § 32-29-7-11, you must serve the petition on the mortgagee, junior lienholders, and any other interested parties. Proof of service must be filed with the court. See Indiana Code § 32-29-7-11.
  6. Attend Any Hearing. If an interested party objects, the court will set a hearing. Prepare to present evidence of your interest and the calculation of the surplus amount.
  7. Obtain Court Order and Disbursement. If the court grants your petition, it will issue an order directing the clerk to disburse the surplus funds to you. The clerk then cuts a check or issues payment according to the court’s instructions.

Helpful Hints

  • Early Contact: Call the county clerk before preparing your petition to confirm deadlines and local procedures.
  • Documentation: Attach certified copies of deeds or lien instruments to prove your claim.
  • Service Rules: Follow Indiana Trial Rule 5 regarding service by certified mail or personal delivery.
  • Deadlines: File within one year of the sale date to avoid forfeiting your right to surplus funds.
  • Professional Review: Have a lawyer or title professional review your petition for completeness and accuracy.

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney.