Understanding and Filing a Motion to Claim Surplus Funds After a Foreclosure in Kentucky

Disclaimer: I am not a lawyer. This article is for general information only and does not constitute legal advice. For advice specific to your situation, consult a licensed Kentucky attorney.

What are surplus funds?

When a property is sold at a foreclosure sale, the sale proceeds first pay the costs of sale and the debts secured by the property in order of priority. If the sale brings in more money than what is needed to pay those obligations, the leftover amount is called the surplus (sometimes called an excess or overage). Surplus funds may belong to the former owner, heirs of a deceased owner, or junior lienholders depending on priority and legal rights.

Overview — Where to start in Kentucky

In Kentucky you generally pursue surplus funds in the court where the foreclosure was handled (usually the circuit court in the county where the property is located). The usual course is to file a motion or petition asking the court to determine who is entitled to the surplus and to order the clerk or sheriff to pay the funds to the proper person or entity.

Step-by-step: Filing a motion to determine rights to surplus funds

1. Find the foreclosure case and sale details.

   Get the foreclosure case number, the court name (typically the county circuit court), and the date of the sale. You can get this information from the county Circuit Clerk’s office, the sheriff’s sale records, or online court records if available.

2. Confirm whether there are surplus funds and who holds them.

   Contact the Circuit Court Clerk or the sheriff’s office that conducted the sale to learn whether surplus funds exist and the amount. The clerk/sheriff often holds the funds until a court order distributes them.

3. Determine your legal interest.

   Are you the former owner, an heir, a beneficiary under a will, a holder of a junior lien, or a creditor? Your documents proving your interest will be essential (deed, will, death certificate, assignment of mortgage, judgment, lien records, etc.). If the owner is deceased and the estate was not probated, you may need to open probate or file documents showing you are an heir or personal representative.

4. Gather supporting documents.

   Collect ID, proof of ownership or interest (deed, mortgage, note, assignment), death certificate (if owner deceased), letters of administration or testamentary (if probate opened), and any correspondence or sale records that show the surplus amount. Create a chain-of-title summary if possible.

5. Prepare the motion or petition.

   Draft a motion (sometimes called a petition to determine surplus funds or petition for distribution of excess proceeds) to the circuit court that handled the foreclosure. Typical elements to include:

   • Caption with court name and case number (use the foreclosure case number if one exists).
   • Your name and contact information and your role (former owner, heir, lienholder).
   • Short statement of relevant facts: identity of the foreclosed owner, date of sale, sale amount, amount of payoff to secured lenders, and the amount of surplus being held.
   • Statement of legal basis for your claim to the surplus (e.g., former owner entitled to surplus after senior liens paid).
   • List of attached evidence (deeds, death certificate, probate papers, lien records).
   • Prayer for relief: ask the court to declare who is entitled to the surplus and issue an order directing the clerk or sheriff to pay you (or other claimant) the listed amount.
   • Proposed order for the judge to sign.
6. File the motion with the correct court clerk.

   File the original motion and the proposed order with the Circuit Clerk where the foreclosure case was handled. Pay any required filing fee or ask about fee-waiver procedures if you cannot pay.

7. Serve notice on interested parties.

   Serve the motion and notice of hearing on all parties who might have an interest in the surplus: the purchaser at the foreclosure sale, the foreclosing lender, any junior lienholders, known creditors, and heirs or any known next-of-kin. Proper service methods and required parties can vary by situation; the Circuit Clerk can explain local practice and Kentucky civil procedure rules about service.

8. Attend the hearing and present evidence.

   The court will schedule a hearing. Be ready to present your documents and explain why you are entitled to the surplus. Other claimants may object or present competing claims. The judge will decide who has the stronger legal right and issue an order directing distribution.

9. Obtain and use the court order to collect funds.

   Once the judge signs an order awarding you the surplus, present the order to the clerk or sheriff holding the funds to receive payment. There may be administrative steps the clerk requires (identification, receipt forms).

Special situations and practical issues

• Owner deceased and estate not probated: If your mom (the former owner) died and the property was foreclosed, the court may require probate documents or at least proof of heirship to determine who is entitled to the surplus. You may need to open a probate estate to establish authority to claim funds.
• Multiple claimants: Junior lienholders or creditors can claim surplus funds. The judge will prioritize rights according to Kentucky law and recorded priorities.
• Timing and possible deadlines: Some claims must be made within particular timeframes. Contact the Circuit Clerk quickly after learning a surplus exists to avoid missing deadlines.
• Costs and fees: Filing, service, and possibly attorney fees can reduce the net recovery. Courts may also deduct administrative fees before distribution.

Where to get forms and local help in Kentucky

• Contact the Circuit Clerk in the county where the property is located — they can tell you whether a surplus exists and the local filing procedure.
• Use the Kentucky Court of Justice website for court locations and general court information: https://kycourts.gov.
• Search Kentucky statutes and legal resources at the Kentucky Legislature site: https://apps.legislature.ky.gov/law/statutes/.
• For procedural questions, review the Kentucky Rules of Civil Procedure available through the Kentucky Court of Justice or consult a local attorney.

Helpful Hints

• Act quickly. Contact the Circuit Clerk as soon as possible to learn whether a surplus exists and any deadlines.
• Bring clear proof of your interest: deed, death certificate, probate papers, mortgage documents, and ID.
• If the owner is deceased, find out whether a probate estate exists; if not, consider opening one to create a clear legal channel to claim funds.
• Keep detailed records of every court filing and service attempt. Certify service where required.
• Consider consulting a Kentucky attorney if multiple parties claim the surplus or if complex title/probate issues exist; an attorney can draft pleadings, handle hearings, and help protect your rights.
• Be prepared for the possibility that other creditors or lienholders may have priority and that the surplus could be distributed to them instead of to the former owner or heirs.

When to get legal help

If the surplus is a significant amount, if competing claimants are involved, or if the estate requires probate matters to be resolved, consult a Kentucky-licensed attorney. An attorney can ensure correct pleading, proper service, and protection of your rights in court.

If you need help finding a Kentucky attorney, the Kentucky Bar Association has a lawyer referral service and online resources at https://www.kybar.org.

Again — this is general information, not legal advice. For guidance tailored to your case, consult a licensed Kentucky attorney or the Circuit Clerk where the foreclosure occurred.