How do I petition for surplus funds after a foreclosure sale in North Carolina?

In North Carolina, when a foreclosure sale generates more than the debt owed, the clerk holds the excess (“surplus funds”). Under N.C. Gen. Stat. § 45-21.38, you must file a special proceeding to claim these funds. Typically, the clerk requires you to petition the superior court of the county where the foreclosure occurred—in our example, Mecklenburg County. Clerks nationwide act conservatively to avoid liability for mispaying surplus funds. That means you must prove both legal ownership of the funds and that any entitled creditors or judgments against the debtor have been paid or are accounted for.

Start by contacting the Mecklenburg County Clerk’s Office. Ask whether they will accept the petition directly or whether you must file in Superior Court. Under § 45-21.38(d), if no proper claim appears within 90 days of the clerk’s notice, the funds go to the North Carolina Department of State Treasurer as unclaimed property. Deadlines matter. Prepare your petition early.

In your petition, request a hearing before the clerk (often called a “surplus funds hearing”). Serve notice on:
• The former mortgagor or their personal representative
• Any person shown in the clerk’s file as having an interest
• All lienholders or judgment creditors identified through a judgment search
You must attach certified copies of key documents and proof of service.

At the hearing, present evidence of:
• Your entitlement—whether as heir, personal representative, or other claimant
• Any divorce orders or property-settlement agreements that remove other parties’ rights
• Judgment or lien searches showing no outstanding claims
• Payment or allowance for any known obligations (for example, child support or unpaid taxes)
If the clerk approves, they will sign an order directing payment. Always confirm with your local clerk, as procedures vary among North Carolina’s 100 counties.

For more detail on preparing documents and presenting evidence, see our related guidance on
what information and documents to provide during your initial call.

Engaging an experienced North Carolina probate attorney helps ensure your petition complies with G.S. § 45-21.38 and local clerk preferences. If you need assistance recovering surplus funds in Mecklenburg County or any other jurisdiction, contact Pierce Law Group. Our team will explain options, file the petition, handle notice and hearing requirements, and pursue payment on your behalf.

Preparing a strong petition for surplus funds in North Carolina requires thorough documentation. Across all 100 counties, clerks demand clear proof of ownership and liability clearance. In Mecklenburg County, for example, you must show why the clerk should pay you rather than another party.

Key documents include:
• Certificate of Appointment or Letters Testamentary: If the original mortgagor is deceased, provide your personal-representative credentials (even if issued by another state, such as Lancaster County, SC).
• Foreclosure and Sale Records: Certified copy of the foreclosure judgment, sale notice, and confirmation of surplus amount.
• Death Certificate: To establish the former owner’s date of death (see N.C. Gen. Stat. § 28A-12-1).
• Divorce Decree or Property-Settlement Agreement: If the mortgagor was divorced before foreclosure, furnish an exemplified copy removing ex-spouse’s rights.
• Heirship Evidence: If intestate, show family-tree affidavits or certified death records of potential heirs.
• Judgment-Lien Search and Payoff Statements: Demonstrate the balance of any child-support arrears, state or federal tax liens, or other judgments to be deducted from your claim (see G.S. § 1-339.10 et seq.).

You should also prepare:
• A proposed order authorizing payment of surplus funds.
• A proof-of-service affidavit showing all interested parties received notice.

Clerks will scrutinize missing or unsigned documents. Always use certified copies and include originals when required. Check local clerk guidelines for formatting and filing fees. If creditors surface late, the clerk may continue your petition or require additional notice.

For an overview of initial information gathering, refer to our blog post on
what information and documents you should provide.

Ready to get your surplus funds petition moving? Pierce Law Group’s attorneys have handled dozens of Mecklenburg County surplus-funds cases. We draft petitions, coordinate service, assemble exhibits, and advocate at the clerk’s hearing. Contact us today to discuss your situation and take the next step toward recovering what you’re owed.