§ 4-9-616 — Explanation of calculation of surplus or deficiency - definitions

(a) In this section:

(1) Explanation means a record that:

(A) States the amount of the surplus or deficiency;

(B) Provides an explanation in accordance with subsection (c) of this section
of how the secured party calculated the surplus or deficiency;

(C) States, if applicable, that future debits, credits, charges, including
additional credit service charges or interest, rebates, and expenses may affect the
amount of the surplus or deficiency; and

(D) Provides a telephone number and mailing address from which additional
information concerning the transaction is available.

(2) Request means a record:

(A) Signed by a debtor or consumer obligor;

(B) Requesting that the recipient provide an explanation; and

(C) Sent after disposition of the collateral under section 4-9-610.

(b) In a consumer-goods transaction in which the debtor is entitled to a
surplus or a consumer obligor is liable for a deficiency under section 4-9-615, the
secured party shall:

(1) Send an explanation to the debtor or consumer obligor, as applicable,
after the disposition and:

(A) Before or when the secured party accounts to the debtor and pays any
surplus or first makes demand in a record on the consumer obligor after the
disposition for payment of the deficiency; and

(B) Within fourteen days after receipt of a request; or

(2) In the case of a consumer obligor who is liable for a deficiency, within
fourteen days after receipt of a request, send to the consumer obligor a record
waiving the secured party's right to a deficiency.

(c) To comply with subsection (a)(1)(B) of this section, an explanation must
provide the following information in the following order:

(1) The aggregate amount of obligations secured by the security interest
under which the disposition was made, and, if the amount reflects a rebate of
unearned interest or credit service charge, an indication of that fact, calculated as
of a specified date:

(A) If the secured party takes or receives possession of the collateral after
default, not more than thirty-five days before the secured party takes or receives
possession; or

(B) If the secured party takes or receives possession of the collateral before
default or does not take possession of the collateral, not more than thirty-five days
before the disposition;

(2) The amount of proceeds of the disposition;

(3) The aggregate amount of the obligations after deducting the amount of
proceeds;

(4) The amount, in the aggregate or by type, and types of expenses,
including reasonable expenses of retaking, holding, preparing for disposition,
processing, and disposing of the collateral, and reasonable attorney's fees secured
by the collateral which are known to the secured party and relate to the current
disposition;

(5) The amount, in the aggregate or by type, and types of credits, including
rebates of interest or credit service charges, to which the obligor is known to be
entitled and which are not reflected in the amount in paragraph (1) of this
subsection (c); and

(6) The amount of the surplus or deficiency.

(d) A particular phrasing of the explanation is not required. An explanation
complying substantially with the requirements of subsection (a) of this section is
sufficient, even if it includes minor errors that do not cause damages to a person
who relies on the information.

(e) A debtor or consumer obligor is entitled without charge to three
responses to a request under this section during any six-month period in which the
secured party did not send to the debtor or consumer obligor an explanation
pursuant to paragraph (1) of subsection (b) of this section. The secured party may
require payment of a charge, not exceeding fifteen dollars, for each additional
response.

Legislative History

Source: L. 2001: Entire article R&RE, p. 1410, � 1, effective July 1. L. 2023: IP(a)(1), (a)(2)(A), (b)(1)(A), and IP(c) amended, (SB 23-090), ch. 136, p. 566 , � 83, effective August 7.