Recovering Surplus Funds in North Carolina: A Guide for Former Homeowners

Foreclosure is an emotional and financial challenge for many North Carolinians, especially as the state has consistently ranked high in foreclosure rates. Following the COVID-19 pandemic and the expiration of the foreclosure moratorium, 2022 saw a significant increase in both tax and lender foreclosures. However, there is a silver lining: many foreclosed properties sell for more than the amount owed, creating what are legally known as surplus funds.

At Surplus Refund LLC, we are dedicated to helping individuals and families navigate the complexities of recovering these funds. Here’s how we can help you claim what’s rightfully yours.

What Are Surplus Funds?

Surplus funds are the proceeds left over after a foreclosure sale once all debts tied to the property are satisfied. In North Carolina, increased property values have resulted in foreclosure sale prices exceeding the debt owed—sometimes by significant margins. These funds belong to the former property owner, but claiming them can be a legal and procedural challenge.

Who Owns the Surplus Funds?

Ownership of surplus funds depends on several factors:

• If the owner of the foreclosed property is clearly identified, the official overseeing the foreclosure process may distribute the funds directly to them.

• In cases where ownership is unclear or contested, the surplus is deposited with the clerk of court in the county where the foreclosure occurred.

Under North Carolina General Statute § 45-21.31, a formal petition must be filed with the court to claim the funds.

How to Claim Surplus Funds

Claiming surplus funds involves several critical steps, including:

1. Filing a Petition for Surplus Funds This formal legal pleading identifies the petitioner, outlines their legal claim, and includes supporting evidence such as an affidavit of title.

   
   

2. Providing Proper Documentation

   The petition must include a legal description of the foreclosed property and authenticated exhibits that verify the claim.

   
   

3. Notifying Other Claimants

   After filing, all potential claimants must be notified through Service of Process, ensuring that the claim meets legal standards.

   
   

4. Attending a Hearing

   The court reviews the petition, documentation, and any testimony provided before determining whether to authorize the release of funds.

Navigating Complex Claims

Claims can become complicated when:

• Multiple Claimants Exist: When multiple parties, such as family members, business partners, or creditors, have a valid claim to the surplus, the process may move to Superior Court for resolution.

• Errors in Filing: Incomplete or inaccurate petitions can delay or invalidate claims.

  
  

At Surplus Refund LLC, we streamline the process, ensuring all documentation is accurate and every claimant is identified to avoid delays.

Why Work with Surplus Refund LLC?

Navigating the petition process can be daunting, especially if you’re unfamiliar with legal proceedings. That’s where we come in:

• Expert Guidance: From drafting petitions to filing affidavits, we handle the heavy lifting for you.

• Personalized Support: We work with claimants to resolve disputes and maximize the amount recovered.

• No Upfront Costs: Our contingency-based model ensures we don’t get paid unless you do.

Don’t Leave Surplus Funds Unclaimed

If you believe you’re entitled to surplus funds from a foreclosure in North Carolina, let Surplus Refund LLC simplify the process for you. Contact us today to take the first step in reclaiming what’s rightfully yours.