Security Interests: Rights

Question 1

Creditors Rights Upon Default

Answer 1

Proceed under UCC or judicial proceeding
Right to require the debtor to assemble
Right to render the collateral unusable to debtor
Right to pursue self-help remedy of repossession
- peaceful repossession
- without: trespassing, assault/battery, breaking & entering
Right to pursue judicial process
Rights on disposal of repossessed collateral:
- Keep Collateral
- send notice to debtor and junior interests
- no objection within 20 days
- Must Sell
- if consumer goods
- if 60% purchase price has been paid
Right to Sell Collateral
(next Card)

Question 2

Right to Sell Collateral

Answer 2

• Time: within 90 days of taking possession (or tort of conversion or any loss to debtor)
• Reasonable Manner: public or private, must give debtor notice of reasonable time and place of disposition
• secured party can disclaim disposal warranties
• secured party can “buy” if public sale

Question 3

Distribution of Proceeds

Answer 3

1. Expenses of secured party
2. Balance of Debt
3. Junior Lien Holders
4. Debtor
   * *creditor may collect from debtor deficiency in sale funds**
   * *after debtor moves, 1st creditor has superiority but must file in new state within 4 months to keep it**