Overview of Arizona Excess Sale Proceeds

What is the Arizona foreclosure process?
When a borrower doesn’t perform their financial obligations, a lender may legally seize and sell a home or other property. This method is called foreclosure. There are various types of foreclosures in Arizona.
- The trustee’s sale procedure is the most used in Arizona. When the lender decides to foreclose on the borrower’s property, there are laws governing the process. Normally the trustee’s sale, in comparison to other processes, is cheaper and quicker (at least 90 days). In this method, there is no court involvement.
- The second process is a judicial foreclosure. This is a court procedure. Therefore, it is more expensive and takes longer. The advantage for the lender is that a deficiency action could be brought against the borrower or guarantor. The homeowners’ association (“HOA”), or those who purchased back taxes may also use this court process.
- The sheriff’s sale comes after the judicial foreclosure. As was already mentioned, the process begins in court. The task of selling the property is then given to the sheriff. Lenders, HOAs, and investors in back taxes normally use this.
The following will discuss a few of the fundamental of Arizona trustee’s sale, foreclosure and tax liens
What choices does a lender have in the event
that the mortgage is not paid?
A foreclosure or trustee’s sale is usually recorded by the lender. A procedure, such as a trustee sale or foreclosure, is governed by the laws of the state where your Arizona trustee sales real property is located. Arizona permits a lender to choose either course of action. You should see a local lawyer who is experienced in this field of law because all states do not have the same laws. Because each person’s situation is different and the legal and tax advice you will receive will vary greatly, do not rely on the internet for correct information.
What is a Judicial foreclosure, and how does it work?
A court-filed legal action known as a judicial foreclosure (this is a court process). The real estate’s owner is served with the notice and given the chance to respond. In the end, the court will issue a judgment, typically in the lender’s favor. The law in the state where the property is located determines what occurs next. The next step in Arizona is a Sheriff’s sale.
What is a trustee’s sale, and how does it work?
A trustee is hired by a lender to collect the money they’ve invested in the property by selling it at a public auction.
If other people bid at the auction, the lender is compensated. If no one bids on the property, the lender becomes the new owner.
What happens once a trustee’s sale or foreclosure is finished? Most likely there will be an eviction.
After a lender completes the trustee’s sale or foreclosure There will be a new owner of the property. Most likely, the new owner will want the previous owner or tenant to vacate the real estate, therefore they will file a forcible entry and detainer action (again, under Arizona law), also known as a FED.
The tenant/occupant is served with a written notice to vacate the premises. The length of the notice to vacate is determined by the type of occupancy, type of lease – commercial or residential, and whether the property is occupied by a renter or a foreclosed owner. Unless the contract specifies otherwise, this period is usually 5 or 7 days. If the tenant/occupant refuses to leave after the 5-7 days have passed, a complaint for forceful detainer action might be initiated. A notice of hearing will be delivered to the property’s occupant. In the end, the new owner will get an eviction order requiring the resident (often the previous owner or tenant) to vacate by a certain time. If the tenant, or old owner, does not leave then the sheriff will forcibly evict the occupant.
If the property is residential (ARS 33-1377) or non-residential (ARS 33-361), the laws regulating forcible entry and detainer actions are different (ARS 33-361).
What happened to any money that was left over after my house was sold at a trustee’s sale or during a foreclosure?
The money in question is known as “excess sale proceeds“. The application process for the funding is set by law. NEVER give up the opportunity to pursue out those monies. Instead, consult an expert lawyer instead so that you are aware of your rights.
Our homes are typically both our most expensive investment and most treasured property.
As a creditor’s attorney many years ago, I conducted thousands of trustee sales in Arizona. Because I wanted to help people keep their homes and prevent them from being lost, I left that industry.
The homeowner should always seek legal and tax advice before moving forward with a trustee’s sale (foreclosure), short sale, or deed in lieu of foreclosure. After the process is finished, significant mistakes cannot be fixed.
As your circumstances change, you might need to learn about your options for dealing with a home that is suddenly a burden.
The rights and obligations of the landowner and the landowner’s creditors are typically defined by the laws of the state where the land is located (except federal lands). The laws that set the rules of the land differ in each state. As soon as your financial situation becomes troubling, see a knowledgeable attorney who specializes in bankruptcy and foreclosure to learn about your choices. You could be pleasantly surprised by your options.

Am I Eligible to File Bankruptcy in Arizona?
Chapter 7 Qualifications
The means test is the major qualification for Chapter 7 debtors. If your annual household income is less than the national average, you may be eligible for this type of bankruptcy. This figure is updated every few months.
If you do not qualify for Chapter 7, other options, such as Chapter 13 bankruptcy are usually available.
Chapter 13 Qualifications
In Chapter 13 cases have limits on the amount and type of debts. There is also a minimum income and expense requirement. Debtors in Chapter 13 must have enough disposable income to make a monthly plan payment.
Helpful Insight
The right to file Bankruptcy bankruptcy is Protected by the United States Constitutional.
As early as 1789, Congress was authorized by the US Constitution’s Art. 1, Section 8, Clause 4 to enact bankruptcy laws to assist all citizens in obtaining a fresh start. The first bankruptcy law was enacted in 1800. Clearly, this option has been viewed as an important tool for protecting our citizens. As a result, you should never feel obligated to apologize to me or anyone else for exercising your constitutional rights.
Arizona Bankruptcy Law
When you file for bankruptcy, an automatic stay is triggered, which immediately stops things like:
- Repossession
- Wage garnishment
- Foreclosure
- Lien placement
- Creditor harassment
The protected repayment period in a Chapter 13 and immediate debt discharge in a Chapter 7 are two other features of bankruptcy law. If you file for Chapter 13, you will have three to five years to catch up on mortgage payments and other delinquent secured debts. If your income is above the median income you will most likely have a five year plan (there are exceptions). Most credit card, medical bill, and other unsecured debt is eliminated in a few months under Chapter 7. But any non-exempt property can be seized and sold to pay your creditors. The result is different in a Chapter 13.

Confused? Of course! That is why it is very important to have an experienced Arizona bankruptcy attorney on your side and helping you with the options.
Bankruptcy in Arizona is a complex interaction of multiple laws that should not be attempted without competent legal counsel.
Do not hire inexperienced attorneys who are unfamiliar with bankruptcy law. I say this not to scare you, but because I’ve seen good people make bad and costly decisions without realizing it.
What are the terms “Pre-Petition Assets” and “Pre-Petition Debts”? What are Assets and Debts after filing the bankruptcy in Arizona?
Pre-petition assets are assets that you owned prior to filing for bankruptcy. Some of these assets may be used to settle pre-petition debts, or payments owed prior to filing for bankruptcy. In a chapter 7, any assets you obtain after filing for bankruptcy in Arizona are usually considered post-petition assets, and most of your pre-petition creditors cannot seize them. Similarly, any liabilities you incur after filing for bankruptcy, referred to as post-petition liabilities, are not discharged in a bankruptcy proceeding. But note that this may differ slightly in a chapter 13 case.
Great attorney
"Great attorney" J. I live in Las Vegas and had a legal matter involving bankruptcy. My attorney in Las Vegas informed me that I would need an attorney from Arizona since the claim was filed in Arizona. I knew no one so went online and searched for Arizona attorneys. [...]
I am glad that Diane was the person to lead me through it
"I am glad that Diane was the person to lead me through it." T. I wish that I did not have to file for bankruptcy protection; nevertheless, having to go through the process I am glad that Diane was the person to lead me through it. Diane definitely [...]
Diane Drain and her staff have guided us through the rough terrain of a bankruptcy
"Diane Drain and her staff have guided us through the rough terrain of a bankruptcy" Anonymous Diane Drain and her staff have guided us through the rough terrain of a bankruptcy. From the beginning of this process,to an end that is quite near, Ms. Drain has provided [...]
Thank you for your expert care with our bankruptcy case
"Thank you for your expert care with our bankruptcy case." J.L. Both Diane Drain and Jay McClimon at Law Office of D.L. Drain are by the far the most passionate, honest, and hardworking people I have ever met. Thank you again for your expert care with our bankruptcy [...]
Thanks to your guidance and insistence that I take responsibility for my case
I knew what to do and what to expect every step of the way thanks to your guidance and insistence that I take responsibility for my case. I greatly appreciate that! Not to mention, both you and Jay are wonderful people. Thanks so much! "Thanks to your [...]
Diane was patient, thorough, sympathetic, quick with responses and obviously knew what she was doing.
“Diane was patient, thorough, sympathetic, quick with responses and obviously knew what she was doing. ” D.S. I've never had to consult a bankruptcy attorney before but recently had to do just that on behalf of a family member. Although we decided to not go through with [...]
Diane helped me understand bankruptcy.
“I am so thankful I got to encounter two amazing people who helped me every step of the way.” M.K.B. I found Diane Drain just by going through Google and looking for an attorney who could help me understand bankruptcy. She was quick to reply to my [...]
Super Kind!
“Super Kind!” Anon She was very professional and stayed in her lane as she knew I had already hired another Attorney. She was kind and made me feel better about my choice that I made. She gave me sound advice, and she didn’t have to do that. [...]
She was very pleasant, knowledgeable and informative
"She was very pleasant, knowledgeable and informative" P.K. I live in Las Vegas and had a legal matter involving bankruptcy. My attorney in Las Vegas informed me that I would need an attorney from Arizona since the claim was filed in Arizona. I knew no one so [...]
You allowed me to be human and treated me with dignity
"You allowed me to be human and treated me with dignity." K.M. I know that you are acutely aware of how deeply emotional and draining financial problems are. You took the time to talk with me about our foreclosure and 2nd mortgage. You allowed me to be human [...]
We are very happy we were referred to Diane for assistance
"We are very happy we were referred to Diane for assistance." S.G. Diane helped my husband and me get past a difficult chapter in our lives. She answered all our questions and gave us excellent advice. We followed her directions from start to finish and the process went [...]
We were treated with the utmost care and respect
"We were treated with the utmost care and respect." A.W. We were very apprehensive and stressed out at the thought of having to go through such a difficult process. From our first meeting with Diane Drain it was clear that we would not have to go through this [...]
Diane and Jay are the Best
“Diane told me how to file a complaint against Scott Forrester and ask the State Bar for my money back.” D.B. Diane and Jay have been wonderful to work with, they are really the best. I found them after paying Scott Forrester and finding out he was [...]
I came to Diane cause her reviews stuck out the most. I WAS NOT DISAPPOINTED!!!
“I came to Diane cause her reviews stuck out the most. I WAS NOT DISAPPOINTED!!!” S.C. I came to Diane cause her reviews stuck out the most. I WAS NOT DISAPPOINTED!!! If you're serious about filing for bankruptcy than I suggest you go with Diane Drain!!! From [...]
My experience was great
"My experience was great" J.H. My experience was great! Diane was very professional and dedicated to helping me with everything I needed. Outstanding! I would recommend her firm to my friends.
Diane helped guide me through the bankruptcy every step of the way, with a very calm demeanor
Diane helped guide me through the bankruptcy every step of the way, with a very calm demeanor. D.W. If you have to file bankruptcy, I recommend you hire Diane Drain. After speaking to 3 other bankruptcy attorneys before Diane, I believe I know the difference between a knowledgeable, professional, [...]
her greatest goal is her clients best interests
“her greatest goal is her clients best interests” R.M. Diane called me today and kindly took 45 minutes of here very valuable time to determine the best course of action for my financial problems. Turns out bankruptcy and her chance for a legal fee were ruled out [...]
This attorney educates clients
"This attorney educates clients!" Anonymous This attorney educates clients on the bankruptcy process and helps them correctly complete the steps needed to reach the end of the process in a timely manner. She is thorough, professional and compassionate.
When Living Longer Means Going Bankrupt
Living Longer, Going Broke: The Rise of Senior Bankruptcies Retirement Dreams vs. RealityRetirement is often considered a time to relax, travel, spend time with family, [...]
Shame Due to Money Problems Can Make Everything Worse
Money Problems Lead to Shame, Which Leads to Making Bad Decisons Money problems are hard enough on their own—but what if the way we feel [...]
Buy Now Pay Later – the Beginning of the End Financially
Buy Now Pay Later (BNPL): Simple and Risky Buy now pay later (BNPL) lets you split the cost of something into smaller payments over time. [...]
Abusive Payday Loans and Bank Overdrafts
New Rule to Protect Borrowers from Repeated Overdraft Bank Fees and Payday Loans On March 30, 2025, a new rule from the Consumer Financial Protection [...]