Property lienholders could recover lawyer fees from sale proceeds

A lienholder could recover reasonable lawyer fees from the proceeds of a permitted property sale. This covers people holding liens, or legal claims against property, under Delaware’s sections 3901 or 3902. The sale must have court authorization, a judgment in the lienholder’s favor, or signed releases from the owners and other required claimants. The 30-day wait begins when all or part of the debt becomes due.

The court could pay creditors with judgments against the owner from leftover sale proceeds. This applies when a sale of property covered by a lien leaves money after earlier claims are paid. The lien, sale costs, lawyer fees, and claims tied to the property are paid first. The court may pay eligible judgment creditors in the order it receives their applications. Judgment creditors must apply within 30 days of the sale.