Montana Code Annotated
Part 6. Default
30-9A-608. Application of proceeds of collection or enforcement -- liability for deficiency and right to surplus

30-9A-608. Application of proceeds of collection or enforcement -- liability for deficiency and right to surplus. (1) If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:
(a) A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under 30-9A-607 in the following order to:
(i) the reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorneys fees and legal expenses incurred by the secured party;
(ii) the satisfaction of obligations secured by the security interest or agricultural lien under which the collection or enforcement is made; and
(iii) 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 an authenticated demand for proceeds before distribution of the proceeds is completed.
(b) 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 subsection (1)(a)(iii).
(c) A secured party need not apply or pay over for application the noncash proceeds of collection and enforcement under 30-9A-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.
(d) A secured party shall account to and pay a debtor for any surplus, and the obligor is liable for any deficiency.
(2) 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.
History: En. Sec. 105, Ch. 305, L. 1999; amd. Sec. 19, Ch. 179, L. 2001; Sec. 30-9-608, MCA 1999; redes. 30-9A-608 by Code Commissioner, 2001.

Structure Montana Code Annotated

Montana Code Annotated

Title 30. Trade and Commerce

Chapter 9A. Uniform Commercial Code Secured Transactions

Part 6. Default

30-9A-601. Rights after default -- judicial enforcement -- consignor or buyer of accounts, chattel paper, payment intangibles, or promissory notes

30-9A-602. Waiver and variance of rights and duties

30-9A-603. Agreement on standards concerning rights and duties

30-9A-604. Procedure if security agreement covers real property or fixtures

30-9A-605. Unknown debtor or secondary obligor

30-9A-606. Time of default for agricultural lien

30-9A-607. Collection and enforcement by secured party

30-9A-608. Application of proceeds of collection or enforcement -- liability for deficiency and right to surplus

30-9A-609. Secured party's right to take possession after default

30-9A-610. Disposition of collateral after default

30-9A-611. Notification before disposition of collateral

30-9A-612. Timeliness of notification before disposition of collateral

30-9A-613. Contents and form of notification before disposition of collateral -- general

30-9A-614. Contents and form of notification before disposition of collateral -- consumer-goods transaction

30-9A-615. Application of proceeds of disposition -- liability for deficiency and right to surplus

30-9A-616. Explanation of calculation of surplus or deficiency

30-9A-617. Rights of transferee of collateral

30-9A-618. Rights and duties of certain secondary obligors

30-9A-619. Transfer of record or legal title

30-9A-620. Acceptance of collateral in full or partial satisfaction -- compulsory disposition of collateral

30-9A-621. Notification of proposal to accept collateral

30-9A-622. Effect of acceptance of collateral

30-9A-623. Right to redeem collateral

30-9A-624. Waiver

30-9A-625. Remedies for secured party's failure to comply with chapter

30-9A-626. Action in which deficiency or surplus is in issue

30-9A-627. Determination of whether conduct was commercially reasonable

30-9A-628. Nonliability and limitation on liability of secured party -- liability of secondary obligor