§ 24-4.5-2-409 — Debt secured by cross-collateral

(1) If debts arising from two (2) or more
consumer credit sales, other than sales pursuant to a revolving charge
account, are secured by cross-collateral (IC 24-4.5-2-408) or
consolidated into one (1) debt payable on a single schedule of
payments, and the debt is secured by security interests taken with
respect to one (1) or more of the sales, payments received by the seller
after the taking of the cross-collateral or the consolidation are deemed,
for the purpose of determining the amount of the debt secured by the
various security interests, to have been first applied to the payment of
the debts arising from the sales first made. To the extent debts are paid
according to this section, security interests in items of property
terminate as the debt originally incurred with respect to each item is
paid.
(2) Payments received by the seller upon a revolving charge account
are deemed, for the purpose of determining the amount of the debt
secured by the various security interests, to have been applied first to
the payment of credit service charges in the order of their entry to the
account and then to the payment of debts in the order in which the
entries to the account showing the debts were made.
(3) If the debts consolidated arose from two (2) or more sales made
on the same day, payments received by the seller are deemed, for the
purpose of determining the amount of the debts secured by the various
security interests, to have been applied first to the payment of the
smallest debt.
Formerly: Acts 1971, P.L.366, SEC.3. As amended by
P.L.247-1983, SEC.13.