Indiana § 26-1-9.1-608 Application of proceeds of collection or enforcement; liability for
deficiency and right to surplus

Indiana Statutes

§ 26-1-9.1-608 — Application of proceeds of collection or enforcement; liability for deficiency and right to surplus

Indiana § 26-1-9.1-608

Title 26COMMERCIAL LAW

Art. 1UNIFORM COMMERCIAL CODE

Ch. 9.1Secured Transactions

This text of Indiana § 26-1-9.1-608 (Application of proceeds of collection or enforcement; liability for deficiency and right to surplus) is published on Counsel Stack Legal Research, covering Indiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Ind. Code § 26-1-9.1-608 (2026).

Text

(a)If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:

(1)A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under IC 26-1-9.1-607 in the following order to:

(A)the reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;

(B)the satisfaction of obligations secured by the security interest or agricultural lien under which the collection or enforcement is made; and

(C)the satisfaction of obligations secured by any subordinate security interest in or other lien on the collateral subject to the security interest or agricultural lie

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(a) If a security interest or agricultural
lien secures payment or performance of an obligation, the following
rules apply:
(1) A secured party shall apply or pay over for application the
cash proceeds of collection or enforcement under IC 26-1-9.1-607
in the following order to:
(A) the reasonable expenses of collection and enforcement and,
to the extent provided for by agreement and not prohibited by
law, reasonable attorney's fees and legal expenses incurred by
the secured party;
(B) the satisfaction of obligations secured by the security
interest or agricultural lien under which the collection or
enforcement is made; and
(C) the satisfaction of obligations secured by any subordinate
security interest in or other lien on the collateral subject to the
security interest or agricultural lien under which the collection
or enforcement is made if the secured party receives a signed
demand for proceeds before distribution of the proceeds is
completed.
(2) If requested by a secured party, a holder of a subordinate
security interest or other lien shall furnish reasonable proof of the
interest or lien within a reasonable time. Unless the holder
complies, the secured party need not comply with the holder's
demand under subdivision (1)(C).
(3) A secured party need not apply or pay over for application
noncash proceeds of collection and enforcement under IC 26-1-9.1-607 unless the failure to do so would be commercially
unreasonable. A secured party that applies or pays over for
application noncash proceeds shall do so in a commercially
reasonable manner.
(4) A secured party shall account to and pay a debtor for any
surplus, and the obligor is liable for any deficiency.
(b) If the underlying transaction is a sale of accounts, chattel paper,
payment intangibles, or promissory notes, the debtor is not entitled to
any surplus, and the obligor is not liable for any deficiency.