A surplus of funds represents an excess of money, occurring when income or receipts exceed expenditures, disbursements, or liabilities. In business, it is a cash surplus, while in real estate, it refers to funds remaining after a foreclosure auction satisfies all debts. These funds can be invested, saved, or used to pay off debts.
Key Aspects of Surplus Funds:
- Foreclosure Surplus: If a home sells for more than the mortgage and tax debt, the former owner or junior lienholders may be entitled to the excess funds held by the court.
- Business/Personal Cash Surplus: A surplus allows for increased investment in short-term instruments (like money market funds) or saving for future needs.
- Government/Municipal Surplus: Governments may experience revenue growth exceeding projections, while projects financed by municipal bonds may place excess revenue into a reserve fund.
- Scams Warning: Beware of scammers offering to help recover foreclosure surplus funds for exorbitant fees, as this process can often be handled directly.
New Jersey Division of Consumer Affairs
What to do with a Surplus:
- Invest: Consider ultra-short duration or arbitrage funds for high liquidity.
- Pay Down Debt: Reduce liabilities to save on interest payments.
- Save/Reinvest: Build cash reserves or reinvest in business growth.