What is a foreclosure surplus?
In a foreclosure, your house or condominium can be sold to pay what you still owe on your mortgage. If your property sells for more than the amount you owe on your home, this extra money is called a surplus.
Collecting a surplus generally ends the foreclosure. Once the surplus is given out, you will not be able to appeal the foreclosure. If you think the foreclosure was wrong, talk to a lawyer before filing any papers to collect your surplus
Who can get a surplus?
The owner of the house or condominium can collect the surplus. You do not have to hire anyone to help you with a surplus. The entire process is based on forms that you can fill out.
Even if you hire a lawyer, you will still have to sign the forms, appear in court with your photo ID, and collect the surplus check when it is ready. There are very few exceptions to this. These rules are in place to protect you from dishonest people who try to take a percentage of the surplus or steal the surplus by pretending to be you.
You can also collect a surplus for someone else if the person died and you are their heir. You can do this by opening a probate estate. This is a more complex legal process, so you will probably need a lawyer to help you.
If the person's total estate was less than $100,000, including the surplus, you may be able to avoid opening a probate estate. When the estate is less than $100,000 you can use a Small Estate Affidavit instead of going through probate. You probably do not need to hire a lawyer if this is the case.
If there is more than one heir, all heirs will have to agree to share the surplus, fill out the paperwork, and appear in court. If there is not an agreement to share the surplus, you will need to hire a lawyer.
A person living in a foreclosed property as a tenant may not collect a surplus.
How do I know if I have a surplus?
If there is a surplus after your property is sold, the foreclosing attorney or officer will send you a Notice of Surplus. This is usually sent to the foreclosed property address unless you have given the court a new address.
If you don't get a notice, or you received it but can't find it now, you can still find out whether there was a surplus in your case. To find out if there is a surplus, go to the circuit clerk's office in your county.
You must bring identification and fill out a form to be allowed to look at the file. You will need your case number (it appears in the top right corner of all your court papers).
When you get the court file, look for the Report of Sale. The Report of Sale should list the amount of your surplus. If the Report of Sale is not in the file, the amount of the surplus, if any, is sometimes listed in the Order Approving Sale.
If you cannot find the papers you need, ask to speak to a supervisor in the circuit clerk's office. The supervisor can help you find a microfiche copy.
You cannot remove papers from, or add papers to, your file. You may make copies, though. Remember to bring change for this. You do not need a certified copy, which is expensive. You only need a photocopy.
In Cook County, you can find information about your case by looking up your case online.
How do I get my surplus?
After there is a final order of foreclosure, you can petition the court for the surplus funds. You must fill out a Petition to Turnover Surplus Funds, and any other forms required by the court, and file them with the circuit clerk.
After you have filled out the paperwork, you must wait 30 days until the foreclosure on your property has been finalized. Once there has been a final judgment on your foreclosure, you are able to send in your forms to get any surplus.
After the papers for the surplus have been filed, you will receive an order from the judge that will give you the right to money based on the surplus from your foreclosure. Take this order to the office that is holding your surplus. This office will then process the order, which takes approximately 10 business days, and the surplus funds will be released.
Does it matter if I filed a bankruptcy in the past?
If you have filed a bankruptcy, it is possible that your creditors might claim a right to some of your surplus funds. You should discuss your surplus with your bankruptcy lawyer. If your bankruptcy case has already been closed, you may have to reopen your bankruptcy case.
If you do want a lawyer, be careful. There are many people who will try to take advantage of you by charging to collect your surplus. Many of these are not lawyers and are operating illegally. Others are lawyers who may not be doing a very good job.
If you do hire a lawyer, you should only hire a lawyer who offers to do the work for a reasonable hourly fee, a flat fee or no fee. Never pay a fee that is a percentage of your surplus. If they charge you a fee, they should give you a written contract that clearly explains your rights and responsibilities and how you will be billed.
The total cost for collecting a surplus should not be very much at all compared to the amount of money you are collecting in the surplus. Unless there is some complicating factor, you really should not need a lawyer to collect your surplus.