Article 9 — Secured Transactions · Section 9-615
This section addresses the disposition of collateral and the obligations of secured parties in secured transactions.
Source: U.C.C. § 9-615
If a secured party disposes of collateral after default, the secured party shall account for any money received and shall satisfy its obligation to dispose of the collateral in a commercially reasonable manner.
UCC § 9-615 outlines the requirements for a secured party to properly handle and report on collateral following a default. It emphasizes that the sale or other disposition of collateral must be done in a commercially reasonable manner and that the secured party must account for the proceeds.
A lender or entity that has a security interest in the collateral.
Property or assets pledged as security for a loan or credit.
Example 1
A bank repossesses a car after the borrower defaults on their auto loan and sells it at an auction, ensuring the sale price reflects fair market value.
Example 2
A furniture leasing company retrieves leased items from a business that has gone bankrupt, selling the assets to recover costs and provide an accounting of the sale proceeds to their client.