Disclaimer: This educational article does not constitute legal advice.
Detailed Answer
1. Overview of Surplus Funds in Virginia Foreclosure Sales
Under Va. Code § 55.1-3236, any excess from a foreclosure sale after satisfying the debt, interest, taxes, and costs must be deposited with the clerk of the circuit court that conducted the sale. The former owner or any party with an interest may petition to recover that surplus. (Va. Code § 55.1-3236).
2. Step 1: Confirm the Existence of Surplus Funds
Contact the circuit court clerk’s office where the foreclosure sale took place. Provide the sale date, case number, and trustee’s deed details. The clerk will confirm whether a surplus deposit exists and the amount held in escrow.
3. Step 2: Prepare and File Your Petition
Draft a petition pursuant to Va. Code § 55.1-3236. Include:
- Foreclosure sale date and court cause number
- Description of the property and parties
- Amount of surplus funds
- Your interest in the property (e.g., former owner, junior lienholder)
- Supporting affidavits, title documents, and trustee’s deed
File the petition with the clerk of the circuit court and pay the applicable filing fee.
4. Step 3: Serve Notice on Interested Parties
Serve a copy of the petition and notice of hearing on all parties with an interest in the surplus, including the trustee, lender, junior lienholders, and any other recorded interest holders. Virginia Rule of Pleading and Practice requires personal or certified mail service. Retain proof of service for the court file.
5. Step 4: Attend the Hearing and Request a Court Order
The court will schedule a hearing date. Present your evidence, affidavits, and proof of service at the hearing. If the court approves, it will issue an order directing the clerk to release the funds to you.
6. Step 5: Collect Your Surplus Funds
Submit the court order to the clerk’s office. The clerk will issue a check for the approved amount, minus clerk’s disbursement fees. You may be required to provide identification and a notarized receipt.
Helpful Hints
- Verify deadlines: Some courts impose deadlines for filing surplus petitions.
- Gather complete documentation on property ownership and lien priorities.
- Consult an attorney if multiple claimants or complex lien issues arise.
- Maintain detailed service records to avoid delays.
- Confirm clerk’s fees and costs before filing.