Recovering Surplus Funds After a Foreclosure Sale in Wisconsin: Step-by-Step FAQ

Disclaimer: This is general information, not legal advice. I am not a lawyer. For advice about a specific situation, consult a Wisconsin-licensed attorney.

Detailed answer

If a foreclosure sale produces money left over after paying the mortgage, taxes, sale costs, and higher-priority liens, that leftover is called surplus funds (or excess proceeds). Under Wisconsin law, an interested person may ask the circuit court to release those funds. The process is a court special proceeding in the county where the foreclosed property is located. Below are practical steps you should expect to follow and the documents you will likely need.

1. Confirm whether surplus funds exist and determine the amount

Request the sheriff’s sale report, sale ledger, or the certificate of sale from the county sheriff or the register of deeds in the county where the property sits. These records show the sale price and the distribution of sale proceeds.
Compare the sale proceeds with the amounts paid to mortgagees, tax authorities, and other lienholders to confirm any surplus amount.

2. Identify who has a legal claim to the surplus

Priority typically follows the lien priority recorded before the foreclosure. Tax claims and prior liens may take precedence.
Potential claimants include: the former owner, junior lienholders, judgment creditors with recorded liens, or others with recorded interests in the property.

3. Prepare a petition (special proceeding) in the correct circuit court

File the petition in the circuit court for the county where the foreclosed property is located.
The petition should describe the property, identify the foreclosure action (case number and judgment of foreclosure if available), state the amount of surplus claimed, and explain the legal basis for your claim.
Attach supporting documents: foreclosure judgment, sheriff’s sale certificate, deed or title documents, lien records, proof of ownership or entitlement, and any assignments or payoff statements.
Refer to the Wisconsin foreclosure statutes for the procedures that govern distribution of sale proceeds. See Wisconsin Statutes, chapter 846 (foreclosure sale and distribution procedures): https://docs.legis.wisconsin.gov/statutes/statutes/846

4. File the petition and pay required fees

Take the petition and attachments to the clerk of circuit court in the county where the property is located. The clerk can tell you the filing fee and local filing procedures.
If you cannot pay the fee, ask the clerk about fee waiver forms and rules (often called in forma pauperis) and the requirements to apply.

5. Serve notice on all interested parties

Service typically must go to the purchaser at the foreclosure sale, the foreclosing mortgagee, any recorded lienholders, and other interested parties. The local court rules will spell out who must be served.
Service methods can include personal service, mail, or certified mail depending on court rules. The court may also require publication if some claimants cannot be located.

6. Attend any hearing and present evidence

The court may schedule a hearing to resolve competing claims. Be ready to explain your legal right to the funds and to present documents proving your claim, such as deeds, lien recordings, assignment papers, payoff ledgers, or affidavits.
If there are competing claimants, the court decides priorities and distributes funds accordingly.

7. Obtain a court order and collect funds

If the court finds you entitled to all or part of the surplus, it will enter an order directing the clerk or sheriff how to distribute funds. The order will instruct the county to issue payment to the claimant named in the order.
The clerk’s office will explain how to collect funds (signing releases, verifying identity, and obtaining a check or wire transfer).

8. Watch deadlines and possible defenses

Time limits and procedural requirements may apply to bring a claim. Some actions can be dismissed for lack of prosecution if not pursued promptly.
Other parties may challenge your claim by asserting superior lien priority or that the claimed amount is inaccurate. Be prepared to address these issues with documents and clear explanation.

9. Consider hiring an attorney

Complex disputes, multiple claimants, or large sums make hiring a Wisconsin-licensed attorney advisable. An attorney can draft pleadings, handle service rules, and present evidence in court.

Practical example (hypothetical)

Example: A house sells at sheriff’s sale for $200,000. The foreclosure judgment shows $150,000 owed to the foreclosing lender. County taxes and sale costs total $5,000. The sheriff’s distribution shows $45,000 remains as surplus. A junior lienholder recorded a mortgage before the sale and files a petition in the circuit court of the county where the house is located alleging entitlement to some or all of the $45,000. The court will require the junior lienholder to file a petition, serve notice on the purchaser and all noticed parties, and prove priority or entitlement. Once the court resolves priorities, it will order distribution of the remaining proceeds.

For statutory context, review Wisconsin Statutes chapter 846 at: https://docs.legis.wisconsin.gov/statutes/statutes/846

Helpful Hints

Start by getting the sheriff’s sale and distribution documents from the county sheriff or circuit court clerk.
Gather documentary proof of your interest: recorded deed, mortgage, assignment, payoff statements, tax bills, or judgment liens.
File in the circuit court where the property is located. Local clerk staff can explain filing fees and basic procedures but cannot give legal advice.
Serve all known interested parties exactly as the rules require — improper service can delay or derail your claim.
Keep copies of every filing, certified mail receipts, and proof of service paperwork in a single organized packet.
If you are unsure who has priority, ask a title examiner or attorney to run a title search before filing your petition.
Be realistic about timelines — these matters sometimes take weeks or months if there are competing claims.
Use the Wisconsin Courts website for self-help information and local court contact details: https://www.wicourts.gov
When in doubt about procedure or the strength of your claim, consult a Wisconsin attorney experienced with foreclosure and post-sale distributions.

Sources & further reading: Wisconsin Statutes, chapter 846 (foreclosure sale provisions): https://docs.legis.wisconsin.gov/statutes/statutes/846 and the Wisconsin Courts website: https://www.wicourts.gov