§ 25-9-616. Explanation of calculation of surplus or deficiency.
§25‑9‑616. Explanation of calculation of surplus or deficiency.
(a) Definitions. Inthis section:
(1) "Explanation"means a writing that:
a. States the amount ofthe surplus or deficiency;
b. Provides anexplanation in accordance with subsection (c) of this section of how thesecured party calculated the surplus or deficiency;
c. States, ifapplicable, that future debits, credits, charges, including additional creditservice charges or interest, rebates, and expenses may affect the amount of thesurplus or deficiency; and
d. Provides a telephonenumber or mailing address from which additional information concerning thetransaction is available.
(2) "Request"means a record:
a. Authenticated by adebtor or consumer obligor;
b. Requesting that therecipient provide an explanation; and
c. Sent afterdisposition of the collateral under G.S. 25‑9‑610.
(b) Explanation ofcalculation. In a consumer‑goods transaction in which the debtor isentitled to a surplus or a consumer obligor is liable for a deficiency underG.S. 25‑9‑615, the secured party shall:
(1) Send an explanationto the debtor or consumer obligor, as applicable, after the disposition and:
a. Before or when thesecured party accounts to the debtor and pays any surplus or first makeswritten demand on the consumer obligor after the disposition for payment of thedeficiency; and
b. Within 14 days afterreceipt of a request; or
(2) In the case of aconsumer obligor who is liable for a deficiency, within 14 days after receiptof a request, send to the consumer obligor a record waiving the secured party'sright to a deficiency.
(c) Requiredinformation. To comply with sub‑subdivision (a)(1)b. of this section, awriting must provide the following information in the following order:
(1) The aggregate amountof obligations secured by the security interest under which the disposition wasmade, and, if the amount reflects a rebate of unearned interest or creditservice charge, an indication of that fact, calculated as of a specified date:
a. If the secured partytakes or receives possession of the collateral after default, not more than 35days before the secured party takes or receives possession; or
b. If the secured partytakes or receives possession of the collateral before default or does not takepossession of the collateral, not more than 35 days before the disposition;
(2) The amount ofproceeds of the disposition;
(3) The aggregate amountof the obligations after deducting the amount of proceeds;
(4) The amount, in theaggregate or by type, and types of expenses, including expenses of retaking,holding, preparing for disposition, processing, and disposing of thecollateral, and attorney's fees secured by the collateral which are known tothe secured party and relate to the current disposition;
(5) The amount, in theaggregate or by type, and types of credits, including rebates of interest orcredit service charges, to which the obligor is known to be entitled and whichare not reflected in the amount in subdivision (1) of this subsection; and
(6) The amount of thesurplus or deficiency.
(d) Substantialcompliance. A particular phrasing of the explanation is not required. Anexplanation complying substantially with the requirements of subsection (a) ofthis section is sufficient, even if it includes minor errors that are notseriously misleading.
(e) Charges forresponses. A debtor or consumer obligor is entitled without charge to oneresponse to a request under this section during any six‑month period inwhich the secured party did not send to the debtor or consumer obligor anexplanation pursuant to subdivision (b)(1) of this section. The secured partymay require payment of a charge not exceeding twenty‑five dollars($25.00) for each additional response. (2000‑169, s. 1.)