70A-9a-607 - Collection and enforcement by secured party.
70A-9a-607. Collection and enforcement by secured party.
(1) If so agreed, and in any event after default, a secured party:
(a) may notify an account debtor or other person obligated on collateral to make paymentor otherwise render performance to or for the benefit of the secured party;
(b) may take any proceeds to which the secured party is entitled under Section70A-9a-315;
(c) may enforce the obligations of an account debtor or other person obligated oncollateral and exercise the rights of the debtor with respect to the obligation of the account debtoror other person obligated on collateral to make payment or otherwise render performance to thedebtor, and with respect to any property that secures the obligations of the account debtor or otherperson obligated on the collateral;
(d) if it holds a security interest in a deposit account perfected by control underSubsection 70A-9a-104(1)(a), may apply the balance of the deposit account to the obligationsecured by the deposit account; and
(e) if it holds a security interest in a deposit account perfected by control underSubsection 70A-9a-104(1)(b) or (c), may instruct the bank to pay the balance of the depositaccount to or for the benefit of the secured party.
(2) If necessary to enable a secured party to exercise under Subsection (1)(c) the right ofa debtor to enforce a mortgage nonjudicially, the secured party may record in the office in whicha record of the mortgage is recorded:
(a) a copy of the security agreement that creates or provides for a security interest in theobligation secured by the mortgage; and
(b) the secured party's sworn affidavit in recordable form stating that:
(i) a default has occurred; and
(ii) the secured party is entitled to enforce the mortgage nonjudicially.
(3) A secured party shall proceed in a commercially reasonable manner if the securedparty:
(a) undertakes to collect from or enforce an obligation of an account debtor or otherperson obligated on collateral; and
(b) is entitled to charge back uncollected collateral or otherwise to full or limited recourseagainst the debtor or a secondary obligor.
(4) A secured party may deduct from the collections made pursuant to Subsection (3)reasonable expenses of collection and enforcement, including reasonable attorney's fees and legalexpenses incurred by the secured party.
(5) This section does not determine whether an account debtor, bank, or other personobligated on collateral owes a duty to a secured party.
Enacted by Chapter 252, 2000 General Session