New York Laws
Sub Part 1 - Default and Enforcement of Security Interest
9-608 - Application of Proceeds of Collection or Enforcement; Liability for Deficiency and Right to Surplus

(a) Application of proceeds, surplus, and deficiency if obligation
secured. 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 Section
9--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 an
authenticated 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 paragraph (1)(C).
(3) A secured party need not apply or pay over for application
noncash proceeds of collection and enforcement under Section
9--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) No surplus or deficiency in sales of certain rights to payment. 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.