Detailed Answer
In Vermont, all mortgage foreclosures proceed through the judicial system under Chapter 163 of Title 12 V.S.A. Once the court orders a sheriff or other officer to sell foreclosed property, the officer must apply net proceeds in a specific order. Any amount left over after paying sale costs, senior and junior mortgage liens, and court costs is called a surplus.
Key statutes:
- 12 V.S.A. § 4784 (application of sale proceeds)
- 12 V.S.A. § 4793 (payment of surplus to mortgagor or entitled party)
To determine if any surplus funds remain after a Vermont foreclosure sale, follow these steps:
- Locate the foreclosure case: Use the Vermont Judiciary’s case search portal (https://www.vermontjudiciary.org) or contact the clerk of the superior court in the county where the property is located.
- Obtain the certificate of distribution: After the sale, the officer files this certificate with the court clerk. It lists all disbursements and any leftover balance.
- Review the certificate for a surplus line item: If the document shows a positive balance after all lienholders and costs are paid, that amount is available as surplus funds.
- Confirm with the clerk’s office: Even if you see a surplus, verify with the clerk what form and documentation they require to claim the funds.
- File a claim for surplus: Prepare a written application or verified claim, include a copy of the foreclosure decree, the certificate of distribution, proof of identity, and any ownership documents. The court will review and issue an order directing payment of the surplus.
Helpful Hints
- Search online first to get the case number, docket entry, and hearing dates before calling the clerk.
- Bring certified copies of pleadings and the foreclosure decree to the clerk’s office to speed up your request.
- Ask whether the court requires a bond or fee to file the surplus claim.
- Double-check junior lien payoffs; unpaid liens can reduce or eliminate the surplus.
- Keep copies of all filings—this documentation proves your claim if competing claims arise.