RIGHTS ON DEFAULT.

Question 1

Rights on Default Generally

Answer 1

The SP has the right either (1) to sue on the debt itself; or (2) take possession of the collateral (even without judicial process, if this can be done without breach of the peace), sell it by public or private sale, and then sue to collect the deficiency. All aspects of the sale must be commercially reasonable. The debtor, sureties, and in non-consumer goods, other secured parties generally are entitled to notice. Notice must be sent within a reasonable time before the sale (10 days prior to non-consumer transactions is deemed reasonable) AND it must contain details about the parties, the collateral, the time and method of sale, etc.

Question 2

Self-help

Answer 2

Can only use self-help if person can do so w/o breaching peace. Physical presence + objection. If party breaches the peace, loses authorization and may be sued for conversion and actual damages.

Question 3

Retention

Answer 3

If debtor has paid 60%, must dispose of collateral within 90 days after repossession. With respect to any other collateral, the SP may propse to retain the collateral in full satisfaction of the obligation, but the secured party must get (1) debtor’s consent in an authenticated record OR the debtor fails to object w/in 20 DAYS, of notice; AND (2) secured party must send WRITTEN NOTICE OF proposal to all other secured parties & debtor who have provided notice or an interest or filed a financing statement AND (3) none of the notified parties objects w/in 20 DAYS after sending notice. If non-consumer goods, SP may retain in partial satisfaction and seek deficiency judgment.

Question 4

Commercially reasonable

Answer 4

Every aspect of sale must be commercially reasonable. Courts will look at the following: (1) sufficiency of the advertising, (2) if the collateral had a limited market, whether people in that market were contacted; (3) whether the collateral needed cleaning or repair; AND (4) if the sale was by public auction, the convenience of the time and place.

i. Must send notice to all SP & D
ii. Proceeds insufficient, file for deficiency
1. Rebuttable presumption in non-consumer transactions that the value received by the sale equals the balance due on the debt.

2. Sale of Consumer goods – Debtor notice Requirements:
   a. Description of D & SP,
   b. method of sale,
   c. description of collateral,
   d. statement that D is entitled to accounting,
   e. time and place of PUBLIC sale or
   f. time after which PRIVATE sale will be held,
   g. authentication of notice,
   h. sent 10 days or more before sale.

Question 5

Debtor’s right of Redemption

Answer 5

Can redeem by paying all obligations in full plus any reasonable expenses