The Walls Law Group

More on Surplus Funds Claims...

*This is a supplemental post to our main article on Surplus Funds.

While anyone would be excited to learn that there is a pot of money awaiting them to claim it, there are some things you should know about the process.

1. It takes time…

Prior to any petition to claim the surplus funds being filed in court, it is essential to have a title search for the owner of the property (whether living or deceased). A title search will show who is in the chain of title that might be owed money from an existing claim against the property.

The court will require a title opinion that shows there are no other potential claims on the money. These claims could be judgment liens (credit card judgments, for example) or tax liens, or even an unpaid second mortgage or equity line of credit.

Any person or entity in the chain of title who are owed legitimate claims against those surplus funds should be paid first before any payments can be made to the prior owner or heirs of the owner.

2. It may require opening an Estate in Court…

If the funds are from a foreclosure sale of property which belonged to a decedent (deceased person), for example, when the heirs of someone who died did not continue to pay the mortgage, and it was foreclosed upon, there will need to be an Estate* opened in order to distribute the money to the rightful heirs. This adds a layer of complexity and potentially expense.

*If this situation applies to you, you’re in the right place! If an Estate needs to be opened to distribute the funds to heirs, we have comprehensive and robust estate administration (probate) practice, right here in the firm, and can do this seamlessly alongside your surplus funds claim.

*If this situation applies to you, you're in the right place!

If an Estate needs to be opened to distribute the funds to heirs, we have comprehensive and robust estate administration (probate) practice, right here in the firm, and can do this seamlessly alongside your surplus funds claim.

3. Where to start?

Our process is to start by ordering a title search. The title search will tell us many things like who exactly holds the legal title to the property and what, if any, claims (liens or judgements) may be attached to the property. Once we receive the title search and determine whether or not there are any outstanding claims against the property, we will be able to tell you whether your claim is worth pursuing. Analyzing claims against the property is an important step because those claims must be satisfied in a priority order (determined by the law) before you, the claimant, will receive any of the remaining funds. If there are substantial claims – for instance a second mortgage – which eat up the funds, it might not be worth pursuing. However, if the property does not have any claims attached to it, you may be entitled to the entire sum (less any “finder” agreements you may have entered into, and/or attorney fees). Wewill have a clearer picture of your claim’s condition after we analyze the title search.

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2020-07-13