Arkansas Foreclosure Surplus Funds: How to Claim What's Yours

When a property is sold at a foreclosure or tax sale in Arkansas for more than the outstanding debt, the former owner may be entitled to the excess money. These funds, known as "surplus funds," rightfully belong to the previous homeowner. Unfortunately, many former owners are unaware these funds exist or how to claim them, leaving millions of dollars unclaimed in court registries across the state.

Understanding Surplus Funds in Arkansas

In Arkansas, the process for handling surplus funds generated from foreclosure sales is generally governed by Ark. Code Ann. § 18-50-109 for judicial foreclosures and Ark. Code Ann. § 18-50-117 for non-judicial foreclosures. While tax sales are treated somewhat differently, the principle remains: if your property sold for more than the taxes, penalties, interest, and costs due, you might be owed money.

After a foreclosure sale, the proceeds are first used to pay off the mortgage, any liens, and the costs associated with the sale. If money remains after all these obligations are satisfied, that leftover amount is the surplus. This money is typically held by the court or the foreclosing entity, awaiting a claim from the rightful owner.

Why Surplus Funds Go Unclaimed

There are several reasons why former homeowners may not claim their surplus funds:

• Lack of Awareness: Many people simply don't know that surplus funds exist. The focus during a foreclosure is often on the loss of the home, not the potential for remaining equity.
• Complex Legal Process: The legal procedures for claiming surplus funds can seem daunting. They involve court filings, specific deadlines, and adherence to legal protocols that are unfamiliar to most individuals.
• Outdated Contact Information: After a foreclosure, former owners often move, and their contact information may not be updated with the court or other relevant parties, making it difficult for them to be notified.
• Discouragement: The emotional toll of foreclosure can lead to disengagement, making it difficult for former owners to pursue what might seem like another complicated legal battle.

Identifying if You Have Surplus Funds

The most direct way to determine if surplus funds are owed to you is to investigate the public records associated with your foreclosure or tax sale. Here’s where to start:

1. County Circuit Clerk (for Foreclosures): For judicial foreclosures, the court clerk in the county where the property is located holds the records and often the funds in a registry. You can check the court docket or contact the clerk's office directly, referring to your property address or the original foreclosure case number.
2. County Collector/Treasurer (for Tax Sales): If your property was sold due to unpaid property taxes, the county collector or treasurer's office in your county is the primary point of contact for information regarding tax sales and any potential surplus. The process for claiming surplus from tax sales is governed by sections such as Ark. Code Ann. § 26-37-208.
3. Trustee or Attorney for the Foreclosure: In the case of non-judicial foreclosures (those handled outside of court, often under a "power of sale" clause in your mortgage), the trustee or the attorney who handled the sale would be the entity responsible for distributing funds. Their contact information would typically be on the public notices related to your foreclosure.

When you contact these offices, be prepared to provide the property address, the date of the sale, and your name as it appeared on the property deed. It