§46-9-522. Maintenance and destruction of records.
(a) Post-lapse maintenance and retrieval of information. The filing office shall maintain a record of the information provided in a filed financing statement for at least one year after the effectiveness of the financing statement has lapsed under section 9-515 with respect to all secured parties of record. The record must be retrievable by using the name of the debtor and:
(1) If the record was filed or recorded in the filing office described in section 9-501(a)(1), by using the file number assigned to the initial financing statement to which the record relates and the date and time that the record was filed or recorded; or
(2) If the record was filed in the filing office described in section 9-501(a)(2), by using the file number assigned to the initial financing statement to which the record relates.
(b) Destruction of written records. Except to the extent that a statute governing disposition of public records provides otherwise, the filing office immediately may destroy any written record evidencing a financing statement. However, if the filing office destroys a written record, it shall maintain another record of the financing statement which complies with subsection (a) of this section.

§46-9-523. Information from filing office; sale or license of records.

(a) Acknowledgment of filing written record. If a person that files a written record requests an acknowledgment of the filing, the filing office shall send to the person an image of the record showing the number assigned to the record pursuant to section 9-519(a)(1) and the date and time of the filing of the record. However, if the person furnishes a copy of the record to the filing office, the filing office may instead:
(1) Note upon the copy the number assigned to the record pursuant to section 9-519(a)(1) and the date and time of the filing of the record; and
(2) Send the copy to the person.
(b) Acknowledgment of filing other record. If a person files a record other than a written record, the filing office shall communicate to the person an acknowledgment that provides:
(1) The information in the record;
(2) The number assigned to the record pursuant to section 9-519(a)(1); and
(3) The date and time of the filing of the record.
(c) Communication of requested information. The filing office shall communicate or otherwise make available in a record the following information to any person that requests it:
(1) Whether there is on file on a date and time specified by the filing office, but not a date earlier than three business days before the filing office receives the request, any financing statement that:
(A) Designates a particular debtor;
(B) Has not lapsed under section 9-515 with respect to all secured parties of record; and
(C) If the request so states, has lapsed under section 9-515 and a record of which is maintained by the filing office under section 9-522(a);
(2) The date and time of filing of each financing statement; and
(3) The information provided in each financing statement.
(d) Medium for communicating information. In complying with its duty under subsection (c) of this section, the filing office may communicate information in any medium. However, if requested, the filing office shall communicate information by issuing its written certificate.
(e) Timeliness of filing office performance. The filing office shall perform the acts required by subsections (a) through (d), inclusive, of this section at the time and in the manner prescribed by filing-office rule, but not later than two business days after the filing office receives the request.
(f) Public availability of records. At least weekly, the secretary of state shall offer to sell or license to the public on a nonexclusive basis, in bulk, copies of all records filed in it under this part, in every medium from time to time available to the filing office.
§46-9-524. Delay by filing office.
Delay by the filing office beyond a time limit prescribed by this part is excused if:
(1) The delay is caused by interruption of communication or computer facilities, war, emergency conditions, failure of equipment or other circumstances beyond control of the filing office; and
(2) The filing office exercises reasonable diligence under the circumstances.
§46-9-525. Fees.
(a) Initial financing statement or other record: general rule. Except as otherwise provided in subsection (e) of this section, the fee for filing and indexing a record under this part, other than an initial financing statement of the kind described in subsection (b) of this section, is the amount specified in subsection (c) of this section, if applicable, plus:
(1) Ten dollars if the record is communicated in writing and consists of one or two pages;
(2) Ten dollars if the record is communicated in writing and consists of more than two pages; and
(3) Ten dollars if the record is communicated by another medium authorized by filing-office rule.
(b) Initial financing statement: public-finance and manufactured housing transactions. Except as otherwise provided in subsection (e) of this section, the fee for filing and indexing an initial financing statement of the kind is the amount specified in subsection (c) of this section, if applicable, plus:
(1) Ten dollars if the financing statement indicates that it is filed in connection with a public-finance transaction;
(2) Ten dollars if the financing statement indicates that it is filed in connection with a manufactured-home transaction.
(c) Number of names. The number of names required to be indexed does not affect the amount of the fee in subsections (a) and (b) of this section.
(d) Response to information request. The fee for responding to a request for information from the filing office, including for issuing a certificate showing whether there is on file any financing statement naming a particular debtor, is:
(1) Five dollars if the request is communicated in writing;
(2) Five dollars if the request is communicated by another medium authorized by filing-office rule; and
(3) Fifty cents per page for each active lien.
(e) Record of mortgage. This section does not require a fee with respect to a record of a mortgage which is effective as a financing statement filed as a fixture filing or as a financing statement covering as-extracted collateral or timber to be cut under section 9-502(c). However, the recording and satisfaction fees that otherwise would be applicable to the record of the mortgage apply.
§46-9-526. Filing-office rules.
(a) Adoption of filing-office rules. The secretary of state shall propose rules for legislative approval consistent with this article and in accordance with the provisions of article three, chapter twenty-nine-a of this code.
(1) Consistent with this article; and
(2) Promulgated pursuant to the provisions of chapter twenty- nine-a of this code.
(b) Harmonization of rules. To keep the filing-office rules and practices of the filing office in harmony with the rules and practices of filing offices in other jurisdictions that enact substantially this part, and to keep the technology used by the filing office compatible with the technology used by filing offices in other jurisdictions that enact substantially this part, the secretary of state, so far as is consistent with the purposes, policies and provisions of this article, in proposing filing-office rules for legislative approval, shall:
(1) Consult with filing offices in other jurisdictions that enact substantially this part; and
(2) Consult the most recent version of the model rules promulgated by the international association of corporate administrators or any successor organization; and
(3) Take into consideration the rules and practices of, and the technology used by, filing offices in other jurisdictions that enact substantially this part.
§46-9-527. Duty to report.
The secretary of state shall report [on or before ________ ] to the joint committee on government and finance the first day of July each year on the operation of the filing office. The report must contain a statement of the extent to which:
(1) The filing-office rules are not in harmony with the rules of filing offices in other jurisdictions that enact substantially this part and the reasons for these variations; and
(2) The filing-office rules are not in harmony with the most recent version of the model rules promulgated by the international association of corporate administrators, or any successor organization, and the reasons for these variations.
PART 6.

DEFAULT.

SUBPART 1. DEFAULT AND ENFORCEMENT OF SECURITY INTEREST.

§46-9-601. Rights after default; judicial enforcement; consignor or buyer of accounts, chattel paper, payment intangibles or promissory notes.

(a) Rights of secured party after default. After default, a secured party has the rights provided in this part and, except as otherwise provided in section 9-602, those provided by agreement of the parties. A secured party:
(1) May reduce a claim to judgment, foreclose or otherwise enforce the claim, security interest or agricultural lien by any available judicial procedure; and
(2) If the collateral is documents, may proceed either as to the documents or as to the goods they cover.
(b) Rights and duties of secured party in possession or control. A secured party in possession of collateral or control of collateral under section 9-104, 9-105, 9-106 or 9-107 has the rights and duties provided in section 9-207.
(c) Rights cumulative; simultaneous exercise. The rights under subsections (a) and (b) of this section are cumulative and may be exercised simultaneously.
(d) Rights of debtor and obligor. Except as otherwise provided in subsection (g) of this section and section 9-605, after default, a debtor and an obligor have the rights provided in this part and by agreement of the parties.
(e) Lien of levy after judgment. If a secured party has reduced its claim to judgment, the lien of any levy that may be made upon the collateral by virtue of an execution based upon the judgment relates back to the earliest of:
(1) The date of perfection of the security interest or agricultural lien in the collateral;
(2) The date of filing a financing statement covering the collateral; or
(3) Any date specified in a statute under which the agricultural lien was created.
(f) Execution sale. A sale pursuant to an execution is a foreclosure of the security interest or agricultural lien by judicial procedure within the meaning of this section. A secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this article.
(g) Consignor or buyer of certain rights to payment. Except as otherwise provided in section 9-607(c), this part imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles or promissory notes.
§46-9-602. Waiver and variance of rights and duties.
Except as otherwise provided in section 9-624, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the rules stated in the following listed sections:
(1) Section 9-207(b)(4)(C), which deals with use and operation of the collateral by the secured party;
(2) Section 9-210, which deals with requests for an accounting and requests concerning a list of collateral and statement of account;
(3) Section 9-607(c), which deals with collection and enforcement of collateral;
(4) Sections 9-608(a) and 9-615(c) to the extent that they deal with application or payment of noncash proceeds of collection, enforcement, or disposition;
(5) Sections 9-608(a) and 9-615(d) to the extent that they require accounting for or payment of surplus proceeds of collateral;
(6) Section 9-609 to the extent that it imposes upon a secured party that takes possession of collateral without judicial process the duty to do so without breach of the peace;
(7) Sections 9-610(b), 9-611, 9-613 and 9-614, which deal with disposition of collateral;
(8) Section 9-615(f), which deals with calculation of a deficiency or surplus when a disposition is made to the secured party, a person related to the secured party, or a secondary obligor;
(9) Section 9-616, which deals with explanation of the calculation of a surplus or deficiency;
(10) Sections 9-620, 9-621 and 9-622, which deal with acceptance of collateral in satisfaction of obligation;
(11) Section 9-623, which deals with redemption of collateral;
(12) Section 9-624, which deals with permissible waivers; and
(13) Sections 9-625 and 9-626, which deal with the secured party's liability for failure to comply with this article.
146-9-603. Agreement on standards concerning rights and duties.
(a) Agreed standards. The parties may determine by agreement the standards measuring the fulfillment of the rights of a debtor or obligor and the duties of a secured party under a rule stated in section 9-602 if the standards are not manifestly unreasonable.
(b) Agreed standards inapplicable to breach of peace. Subsection (a) of this section does not apply to the duty under section 9-609 to refrain from breaching the peace.
§46-9-604. Procedure if security agreement covers real property or fixtures.

(a) Enforcement: personal and real property. If a security agreement covers both personal and real property, a secured party may proceed:
(1) Under this part as to the personal property without prejudicing any rights with respect to the real property; or
(2) As to both the personal property and the real property in accordance with the rights with respect to the real property, in which case the other provisions of this part do not apply.
(b) Enforcement: fixtures. Subject to subsection (c) of this section, if a security agreement covers goods that are or become fixtures, a secured party may proceed:
(1) Under this part; or
(2) In accordance with the rights with respect to real property, in which case the other provisions of this part do not apply.
(c) Removal of fixtures. Subject to the other provisions of this part, if a secured party holding a security interest in fixtures has priority over all owners and encumbrancers of the real property, the secured party, after default, may remove the collateral from the real property.
(d) Injury caused by removal. A secured party that removes collateral shall promptly reimburse any encumbrancer or owner of the real property, other than the debtor, for the cost of repair of any physical injury caused by the removal. The secured party need not reimburse the encumbrancer or owner for any diminution in value of the real property caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.
§46-9-605. Unknown debtor or secondary obligor.
A secured party does not owe a duty based on its status as secured party:
(1) To a person that is a debtor or obligor, unless the secured party knows:
(A) That the person is a debtor or obligor;
(B) The identity of the person; and
(C) How to communicate with the person; or
(2) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:
(A) That the person is a debtor; and
(B) The identity of the person.
§46-9-606. Time of default for agricultural lien.
For purposes of this part, a default occurs in connection with an agricultural lien at the time the secured party becomes entitled to enforce the lien in accordance with the statute under which it was created.
§46-9-607. Collection and enforcement by secured party.
(a) Collection and enforcement generally. If so agreed, and in any event after default, a secured party:
(1) May notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party;
(2) May take any proceeds to which the secured party is entitled under section 9-315;
(3) May enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral;
(4) If it holds a security interest in a deposit account perfected by control under section 9-104(a)(1), may apply the balance of the deposit account to the obligation secured by the deposit account; and
(5) If it holds a security interest in a deposit account perfected by control under section 9-104(a)(2) or (3), may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.
(b) Nonjudicial enforcement of mortgage. If necessary to enable a secured party to exercise under subsection (a)(3) of this section the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded:
(1) A copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and
(2) The secured party's sworn affidavit in recordable form stating that:
(A) A default has occurred; and
(B) The secured party is entitled to enforce the mortgage nonjudicially.
(c) Commercially reasonable collection and enforcement. A secured party shall proceed in a commercially reasonable manner if the secured party:
(1) Undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral; and
(2) Is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.
(d) Expenses of collection and enforcement. A secured party may deduct from the collections made pursuant to subsection (c) of this section reasonable expenses of collection and enforcement, including reasonable attorney's fees and legal expenses incurred by the secured party.
(e) Duties to secured party not affected. This section does not determine whether an account debtor, bank or other person obligated on collateral owes a duty to a secured party.
§46-9-608. 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) of this subsection.
(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.
§46-9-609. Secured party's right to take possession after default.
(a) Possession; rendering equipment unusable; disposition on debtor's premises. After default, a secured party:
(1) May take possession of the collateral; and
(2) Without removal, may render equipment unusable and dispose of collateral on a debtor's premises under section 9-610.
(b) Judicial and nonjudicial process. A secured party may proceed under subsection (a) of this section:
(1) Pursuant to judicial process; or
(2) Without judicial process, if it proceeds without breach of the peace.
(c) Assembly of collateral. If so agreed, and in any event after default, a secured party may require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties.
§46-9-610. Disposition of collateral after default.
(a) Disposition after default. After default, a secured party may sell, lease, license or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing.
(b) Commercially reasonable disposition. Every aspect of a disposition of collateral, including the method, manner, time, place and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms.
(c) Purchase by secured party. A secured party may purchase collateral:
(1) At a public disposition; or
(2) At a private disposition only if the collateral is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations.
(d) Warranties on disposition. A contract for sale, lease, license or other disposition includes the warranties relating to title, possession, quiet enjoyment, and the like which by operation of law accompany a voluntary disposition of property of the kind subject to the contract.
(e) Disclaimer of warranties. A secured party may disclaim or modify warranties under subsection (d) of this section:
(1) In a manner that would be effective to disclaim or modify the warranties in a voluntary disposition of property of the kind subject to the contract of disposition; or
(2) By communicating to the purchaser a record evidencing the contract for disposition and including an express disclaimer or modification of the warranties.
(f) Record sufficient to disclaim warranties. A record is sufficient to disclaim warranties under subsection (e) of this section if it indicates "There is no warranty relating to title, possession, quiet enjoyment, or the like in this disposition" or uses words of similar import.
§46-9-611. Notification before disposition of collateral.
(a) "Notification date." In this section, "notification date" means the earlier of the date on which:
(1) A secured party sends to the debtor and any secondary obligor an authenticated notification of disposition; or
(2) The debtor and any secondary obligor waive the right to notification.
(b) Notification of disposition required. Except as otherwise provided in subsection (d) of this section, a secured party that disposes of collateral under section 9-610 shall send to the persons specified in subsection (c) of this section a reasonable authenticated notification of disposition.
(c) Persons to be notified. To comply with subsection (b), the secured party shall send an authenticated notification of disposition to:
(1) The debtor;
(2) Any secondary obligor; and
(3) If the collateral is other than consumer goods:
(A) Any other person from which the secured party has received, before the notification date, an authenticated notification of a claim of an interest in the collateral;
(B) Any other secured party or lienholder that, ten days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:
(i) Identified the collateral;
(ii) Was indexed under the debtor's name as of that date; and
(iii) Was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date; and
(C) Any other secured party that, ten days before the notification date, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in section 9-311(a).
(d) Subsection (b) inapplicable: perishable collateral; recognized market. Subsection (b) of this section does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.
(e) Compliance with subsection (c)(3)(B). A secured party complies with the requirement for notification prescribed by subsection (c)(3)(B) of this section if:
(1) Not later than twenty days or earlier than thirty days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor's name in the office indicated in subsection (c)(3)(B) of this section; and
(2) Before the notification date, the secured party:
(A) Did not receive a response to the request for information; or
(B) Received a response to the request for information and sent an authenticated notification of disposition to each secured party or other lienholder named in that response whose financing statement covered the collateral.
§46-9-612. Timeliness of notification before disposition of collateral.

(a) Reasonable time is question of fact. Except as otherwise provided in subsection (b) of this section, whether a notification is sent within a reasonable time is a question of fact.
(b) Ten-day period sufficient in non-consumer transaction. In a transaction other than a consumer transaction, a notification of disposition sent after default and ten days or more before the earliest time of disposition set forth in the notification is sent within a reasonable time before the disposition.
§46-9-613. Contents and form of notification before disposition of collateral: general.

Except in a consumer-goods transaction, the following rules apply:
(1) The contents of a notification of disposition are sufficient if the notification:
(A) Describes the debtor and the secured party;
(B) Describes the collateral that is the subject of the intended disposition;
(C) States the method of intended disposition;
(D) States that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting; and
(E) States the time and place of a public disposition or the time after which any other disposition is to be made.
(2) Whether the contents of a notification that lacks any of the information specified in paragraph (1) of this section are nevertheless sufficient is a question of fact.
(3) The contents of a notification providing substantially the information specified in paragraph (1) of this section are sufficient, even if the notification includes:
(A) Information not specified by that paragraph; or
(B) Minor errors that are not seriously misleading.
(4) A particular phrasing of the notification is not required.
(5) The following form of notification and the form appearing in section 9-614(3), when completed, each provides sufficient information:

NOTIFICATION OF DISPOSITION OF COLLATERAL

To:
[Name of debtor, obligor, or other person to which the notification is sent]

From:
   [Name, address, and telephone number of secured party]

Name of Debtor(s):
   [Include only if debtor(s) are not an addressee]    

For a public disposition:
We will sell or [lease or license, as applicable] the    [describe collateral]   to the highest qualified bidder in public as follows:
Day and Date: ____________
Time:
____________

Place:
____________

For a private disposition:
We will sell [or lease or license, as applicable] the   [describe collateral]     privately sometime after     [day and date]    .
You are entitled to an accounting of the unpaid indebtedness secured by the property that we intend to sell [or lease or license, as applicable] for a charge of $ __________. You may request an accounting by calling us at     [telephone number]    .
[End of Form]

§46-9-614. Contents and form of notification before disposition of collateral: consumer-goods transaction.

In a consumer-goods transaction, the following rules apply:
(1) A notification of disposition must provide the following information:
(A) The information specified in section 9-613(1);
(B) A description of any liability for a deficiency of the person to which the notification is sent;
(C) A telephone number from which the amount that must be paid to the secured party to redeem the collateral under section 9-623 is available; and
(D) A telephone number or mailing address from which additional information concerning the disposition and the obligation secured is available.
(2) A particular phrasing of the notification is not required.
(3) The following form of notification, when completed, provides sufficient information:
     [Name and address of secured party]     
     [
Date]     
NOTICE OF OUR PLAN TO SELL PROPERTY

     [Name and address of any obligor who is also a debtor]     
Subject:       [Identification of Transaction]     

We have your       [describe collateral]     , because you broke promises in our agreement.

For a public disposition:
We will sell       [describe collateral]      at public sale. A sale could include a lease or license. The sale will be held as follows:
Date:______________________________                 
Time:______________________________           
Place:______________________________            
You may attend the sale and bring bidders if you want.

For a private disposition:
We will sell       [describe collateral]      at private sale sometime after      [date]     . A sale could include a lease or license.

The money that we get from the sale (after paying our costs) will reduce the amount you owe. If we get less money than you owe, you      [will or will not, as applicable]      still owe us the difference. If we get more money than you owe, you will get the extra money, unless we must pay it to someone else.

You can get the property back at any time before we sell it by paying us the full amount you owe (not just the past due payments), including our expenses. To learn the exact amount you must pay, call us at      [telephone number]     .

If you want us to explain to you in writing how we have figured the amount that you owe us, you may call us at      [telephone number]      or write us at      [secured party's address]      and request a written explanation.

If you need more information about the sale call us at      [telephone number]      or write us at      [secured party's address]     .

We are sending this notice to the following other people who have an interest in      [describe collateral]      or who owe money under your agreement:
     [Names of all other debtors and obligors, if any]     
[End of Form]

(4) A notification in the form of paragraph (3) of this section is sufficient, even if additional information appears at the end of the form.
(5) A notification in the form of paragraph (3) of this section is sufficient, even if it includes errors in information not required by paragraph (1) of this section, unless the error is misleading with respect to rights arising under this article.
(6) If a notification under this section is not in the form of paragraph (3) of this section, law other than this article determines the effect of including information not required by paragraph (1) of this section.
§46-9-615. Application of proceeds of disposition; liability for deficiency and right to surplus.

(a) Application of proceeds. A secured party shall apply or pay over for application the cash proceeds of disposition under section 9-610 in the following order to:
(1) The reasonable expenses of retaking, holding, preparing for disposition, processing and disposing, 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;
(2) The satisfaction of obligations secured by the security interest or agricultural lien under which the disposition is made;
(3) The satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral if:
(A) The secured party receives from the holder of the subordinate security interest or other lien an authenticated demand for proceeds before distribution of the proceeds is completed; and
(B) In a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor; and
(4) A secured party that is a consignor of the collateral if the secured party receives from the consignor an authenticated demand for proceeds before distribution of the proceeds is completed.
(b) Proof of subordinate interest. 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 does so, the secured party need not comply with the holder's demand under subsection (a)(3).
(c) Application of noncash proceeds. A secured party need not apply or pay over for application noncash proceeds of disposition under section 9-610 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) Surplus or deficiency if obligation secured. If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by subsection (a) of this section and permitted by subsection (c) of this section:
(1) Unless subsection (a)(4) of this section requires the secured party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus; and
(2) The obligor is liable for any deficiency.
(e) 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:
(1) The debtor is not entitled to any surplus; and
(2) The obligor is not liable for any deficiency.
(f) Calculation of surplus or deficiency in disposition to person related to secured party. The surplus or deficiency following a disposition is calculated based on the amount of proceeds that would have been realized in a disposition complying with this part to a transferee other than the secured party, a person related to the secured party, or a secondary obligor if:
(1) The transferee in the disposition is the secured party, a person related to the secured party, or a secondary obligor; and
(2) The amount of proceeds of the disposition is significantly below the range of proceeds that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.
(g) Cash proceeds received by junior secured party. A secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest or agricultural lien under which the disposition is made:
(1) Takes the cash proceeds free of the security interest or other lien;
(2) Is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest or other lien; and
(3) Is not obligated to account to or pay the holder of the security interest or other lien for any surplus.
§46-9-616. Explanation of calculation of surplus or deficiency.
(a) Definitions. In this section:
(1) "Explanation" means a writing that:
(A) States the amount of the surplus or deficiency;
(B) Provides an explanation in accordance with subsection (c) of this section of how the secured party calculated the surplus or deficiency;
(C) States, if applicable, that future debits, credits, charges, including additional credit service charges or interest, rebates, and expenses may affect the amount of the surplus or deficiency; and
(D) Provides a telephone number or mailing address from which additional information concerning the transaction is available.
(2) "Request" means a record:
(A) Authenticated by a debtor or consumer obligor;
(B) Requesting that the recipient provide an explanation; and
(C) Sent after disposition of the collateral under section 9-610.
(b) Explanation of calculation. In a consumer-goods transaction in which the debtor is entitled to a surplus or a consumer obligor is liable for a deficiency under section 9-615, the secured party shall:
(1) Send an explanation to the debtor or consumer obligor, as applicable, after the disposition and:
(A) Before or when the secured party accounts to the debtor and pays any surplus or first makes written demand on the consumer obligor after the disposition for payment of the deficiency; and
(B) Within fourteen days after receipt of a request; or
(2) In the case of a consumer obligor who is liable for a deficiency, within fourteen days after receipt of a request, send to the consumer obligor a record waiving the secured party's right to a deficiency.
(c) Required information. To comply with subsection (a)(1)(B) of this section, a writing must provide the following information in the following order:
(1) The aggregate amount of obligations secured by the security interest under which the disposition was made, and, if the amount reflects a rebate of unearned interest or credit service charge, an indication of that fact, calculated as of a specified date:
(A) If the secured party takes or receives possession of the collateral after default, not more than thirty-five days before the secured party takes or receives possession; or
(B) If the secured party takes or receives possession of the collateral before default or does not take possession of the collateral, not more than thirty-five days before the disposition;
(2) The amount of proceeds of the disposition;
(3) The aggregate amount of the obligations after deducting the amount of proceeds;
(4) The amount, in the aggregate or by type, and types of expenses, including expenses of retaking, holding, preparing for disposition, processing, and disposing of the collateral, and attorney's fees secured by the collateral which are known to the secured party and relate to the current disposition;
(5) The amount, in the aggregate or by type, and types of credits, including rebates of interest or credit service charges, to which the obligor is known to be entitled and which are not reflected in the amount in paragraph (1) of this subsection; and
(6) The amount of the surplus or deficiency.
(d) Substantial compliance. A particular phrasing of the explanation is not required. An explanation complying substantially with the requirements of subsection (a) of this section is sufficient, even if it includes minor errors that are not seriously misleading.
(e) Charges for responses. A debtor or consumer obligor is entitled without charge to one response to a request under this section during any six-month period in which the secured party did not send to the debtor or consumer obligor an explanation pursuant to subdivision (1), subsection (b) of this section. The secured party may require payment of a charge not exceeding twenty-five dollars for each additional response.
§46-9-617. Rights of transferee of collateral.
(a) Effects of disposition. A secured party's disposition of collateral after default:
(1) Transfers to a transferee for value all of the debtor's rights in the collateral;
(2) Discharges the security interest under which the disposition is made; and
(3) Discharges any subordinate security interest or other subordinate lien.
(b) Rights of good-faith transferee. A transferee that acts in good faith takes free of the rights and interests described in subsection (a) of this section, even if the secured party fails to comply with this article or the requirements of any judicial proceeding.
(c) Rights of other transferee. If a transferee does not take free of the rights and interests described in subsection (a) of this section, the transferee takes the collateral subject to:
(1) The debtor's rights in the collateral;
(2) The security interest or agricultural lien under which the disposition is made; and
(3) Any other security interest or other lien.
§46-9-618. Rights and duties of certain secondary obligors.
(a) Rights and duties of secondary obligor. A secondary obligor acquires the rights and becomes obligated to perform the duties of the secured party after the secondary obligor:
(1) Receives an assignment of a secured obligation from the secured party;
(2) Receives a transfer of collateral from the secured party and agrees to accept the rights and assume the duties of the secured party; or
(3) Is subrogated to the rights of a secured party with respect to collateral.
(b) Effect of assignment, transfer or subrogation. An assignment, transfer or subrogation described in subsection (a) of this section:
(1) Is not a disposition of collateral under section 9-610; and
(2) Relieves the secured party of further duties under this article.
§46-9-619. Transfer of record or legal title.
(a) "Transfer statement." In this section, "transfer statement" means a record authenticated by a secured party stating:
(1) That the debtor has defaulted in connection with an obligation secured by specified collateral;
(2) That the secured party has exercised its post-default remedies with respect to the collateral;
(3) That, by reason of the exercise, a transferee has acquired the rights of the debtor in the collateral; and
(4) The name and mailing address of the secured party, debtor and transferee.
(b) Effect of transfer statement. A transfer statement entitles the transferee to the transfer of record of all rights of the debtor in the collateral specified in the statement in any official filing, recording, registration or certificate-of-title system covering the collateral. If a transfer statement is presented with the applicable fee and request form to the official or office responsible for maintaining the system, the official or office shall:
(1) Accept the transfer statement;
(2) Promptly amend its records to reflect the transfer; and
(3) If applicable, issue a new appropriate certificate of title in the name of the transferee.
(c) Transfer not a disposition; no relief of secured party's duties. A transfer of the record or legal title to collateral to a secured party under subsection (b) of this section or otherwise is not of itself a disposition of collateral under this article and does not of itself relieve the secured party of its duties under this article.
§46-9-620. Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.

(a) Conditions to acceptance in satisfaction. Except as otherwise provided in subsection (g) of this section, a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:
(1) The debtor consents to the acceptance under subsection (c) of this section;
(2) The secured party does not receive, within the time set forth in subsection (d) of this section, a notification of objection to the proposal authenticated by:
(A) A person to which the secured party was required to send a proposal under section 9-621; or
(B) Any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is the subject of the proposal;
(3) If the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and
(4) Subsection (e) of this section does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to section 9-624.
(b) Purported acceptance ineffective. A purported or apparent acceptance of collateral under this section is ineffective unless:
(1) The secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and
(2) The conditions of subsection (a) of this section are met.
(c) Debtor's consent. For purposes of this section:
(1) A debtor consents to an acceptance of collateral in partial satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default; and
(2) A debtor consents to an acceptance of collateral in full satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record authenticated after default or the secured party:
(A) Sends to the debtor after default a proposal that is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained;
(B) In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and
(C) does not receive a notification of objection authenticated by the debtor within twenty days after the proposal is sent.
(d) Effectiveness of notification. To be effective under subsection (a)(2) of this section, a notification of objection must be received by the secured party:
(1) In the case of a person to which the proposal was sent pursuant to section 9-621, within twenty days after notification was sent to that person; and
(2) In other cases:
(A) Within twenty days after the last notification was sent pursuant to section 9-621; or
(B) If a notification was not sent, before the debtor consents to the acceptance under subsection (c) of this section.
(e) Mandatory disposition of consumer goods. A secured party that has taken possession of collateral shall dispose of the collateral pursuant to section 9-610 within the time specified in subsection (f) of this section if:
(1) Sixty percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or
(2) Sixty percent of the principal amount of the obligation secured has been paid in the case of a non-purchase-money security interest in consumer goods.
(f) Compliance with mandatory disposition requirement. To comply with subsection (e) of this section, the secured party shall dispose of the collateral:
(1) Within ninety days after taking possession; or
(2) Within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and authenticated after default.
(g) No partial satisfaction in consumer transaction. In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.
§46-9-621. Notification of proposal to accept collateral.
(a) Persons to which proposal to be sent. A secured party that desires to accept collateral in full or partial satisfaction of the obligation it secures shall send its proposal to:
(1) Any person from which the secured party has received, before the debtor consented to the acceptance, an authenticated notification of a claim of an interest in the collateral;
(2) Any other secured party or lienholder that, ten days before the debtor consented to the acceptance, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:
(A) Identified the collateral;
(B) Was indexed under the debtor's name as of that date; and
(C) Was filed in the office or offices in which to file a financing statement against the debtor covering the collateral as of that date; and
(3) Any other secured party that, ten days before the debtor consented to the acceptance, held a security interest in the collateral perfected by compliance with a statute, regulation or treaty described in section 9-311(a).
(b) Proposal to be sent to secondary obligor in partial satisfaction. A secured party that desires to accept collateral in partial satisfaction of the obligation it secures shall send its proposal to any secondary obligor in addition to the persons described in subsection (a) of this section.
§46-9-622. Effect of acceptance of collateral.
(a) Effect of acceptance. A secured party's acceptance of collateral in full or partial satisfaction of the obligation it secures:
(1) Discharges the obligation to the extent consented to by the debtor;
(2) Transfers to the secured party all of a debtor's rights in the collateral;
(3) Discharges the security interest or agricultural lien that is the subject of the debtor's consent and any subordinate security interest or other subordinate lien; and
(4) Terminates any other subordinate interest.
(b) Discharge of subordinate interest notwithstanding noncompliance. A subordinate interest is discharged or terminated under subsection (a) of this section, even if the secured party fails to comply with this article.
§46-9-623. Right to redeem collateral.
(a) Persons that may redeem. A debtor, any secondary obligor, or any other secured party or lienholder may redeem collateral.
(b) Requirements for redemption. To redeem collateral, a person shall tender:
(1) Fulfillment of all obligations secured by the collateral; and
(2) The reasonable expenses and attorney's fees described in section 9-615(a)(1).
(c) When redemption may occur. A redemption may occur at any time before a secured party:
(1) Has collected collateral under section 9-607;
(2) Has disposed of collateral or entered into a contract for its disposition under section 9-610; or
(3) Has accepted collateral in full or partial satisfaction of the obligation it secures under section 9-622.
§46-9-624. Waiver.
(a) Waiver of disposition notification. A debtor or secondary obligor may waive the right to notification of disposition of collateral under section 9-611 only by an agreement to that effect entered into and authenticated after default.
(b) Waiver of mandatory disposition. A debtor may waive the right to require disposition of collateral under section 9-620(e) only by an agreement to that effect entered into and authenticated after default.
(c) Waiver of redemption right. Except in a consumer-goods transaction, a debtor or secondary obligor may waive the right to redeem collateral under section 9-623 only by an agreement to that effect entered into and authenticated after default.
SUBPART 2. NONCOMPLIANCE WITH ARTICLE.

§46-9-625. Remedies for secured party's failure to comply with article.

(a) Judicial orders concerning noncompliance. If it is established that a secured party is not proceeding in accordance with this article, a court may order or restrain collection, enforcement, or disposition of collateral on appropriate terms and conditions.
(b) Damages for noncompliance. Subject to subsections (c), (d) and (f) of this section, a person is liable for damages in the amount of any loss caused by a failure to comply with this article. Loss caused by a failure to comply may include loss resulting from the debtor's inability to obtain, or increased costs of, alternative financing.
(c) Persons entitled to recover damages; statutory damages in consumer-goods transaction. Except as otherwise provided in section 9-628:
(1) A person that, at the time of the failure, was a debtor, was an obligor, or held a security interest in or other lien on the collateral may recover damages under subsection (b) of this section for its loss; and
(2) If the collateral is consumer goods, a person that was a debtor or a secondary obligor at the time a secured party failed to comply with this part may recover for that failure in any event an amount not less than the credit service charge plus ten percent of the principal amount of the obligation or the time-price differential plus ten percent of the cash price.
(d) Recovery when deficiency eliminated or reduced. A debtor whose deficiency is eliminated under section 9-626 may recover damages for the loss of any surplus. However, a debtor or secondary obligor whose deficiency is eliminated or reduced under section 9-626 may not otherwise recover under subsection (b) of this section for noncompliance with the provisions of this part relating to collection, enforcement, disposition or acceptance.
(e) Statutory damages: noncompliance with specified provisions. In addition to any damages recoverable under subsection (b) of this section, the debtor, consumer obligor or person named as a debtor in a filed record, as applicable, may recover five hundred dollars in each case from a person that:
(1) Fails to comply with section 9-208;
(2) Fails to comply with section 9-209;

(3) Files a record that the person is not entitled to file under section 9-509(a);
(4) Fails to cause the secured party of record to file or send a termination statement as required by section 9-513(a) or (c);
(5) Fails to comply with section 9-616(b)(1) and whose failure is part of a pattern, or consistent with a practice, of noncompliance; or
(6) Fails to comply with section 9-616(b)(2).
(f) Statutory damages: noncompliance with section 9-210. A debtor or consumer obligor may recover damages under subsection (b) of this section and, in addition, five hundred dollars in each case from a person that, without reasonable cause, fails to comply with a request under section 9-210. A recipient of a request under section 9-210 which never claimed an interest in the collateral or obligations that are the subject of a request under that section has a reasonable excuse for failure to comply with the request within the meaning of this subsection.
(g) Limitation of security interest: noncompliance with section 9-210. If a secured party fails to comply with a request regarding a list of collateral or a statement of account under section 9-210, the secured party may claim a security interest only as shown in the list or statement included in the request as against a person that is reasonably misled by the failure.
§46-9-626. Action in which deficiency or surplus is in issue.
(a) Applicable rules if amount of deficiency or surplus in issue. In an action arising from a transaction, other than a consumer transaction, in which the amount of a deficiency or surplus is in issue, the following rules apply:
(1) A secured party need not prove compliance with the provisions of this part relating to collection, enforcement, disposition or acceptance unless the debtor or a secondary obligor places the secured party's compliance in issue.
(2) If the secured party's compliance is placed in issue, the secured party has the burden of establishing that the collection, enforcement, disposition or acceptance was conducted in accordance with this part.
(3) Except as otherwise provided in section 9-628, if a secured party fails to prove that the collection, enforcement, disposition, or acceptance was conducted in accordance with the provisions of this part relating to collection, enforcement, disposition, or acceptance, the liability of a debtor or a secondary obligor for a deficiency is limited to an amount by which the sum of the secured obligation, expenses, and attorney's fees exceeds the greater of:
(A) The proceeds of the collection, enforcement, disposition or acceptance; or
(B) The amount of proceeds that would have been realized had the noncomplying secured party proceeded in accordance with the provisions of this part relating to collection, enforcement, disposition or acceptance.
(4) For purposes of paragraph (3)(B) of this subsection, the amount of proceeds that would have been realized is equal to the sum of the secured obligation, expenses and attorney's fees unless the secured party proves that the amount is less than that sum.
(5) If a deficiency or surplus is calculated under section 9-615(f), the debtor or obligor has the burden of establishing that the amount of proceeds of the disposition is significantly below the range of prices that a complying disposition to a person other than the secured party, a person related to the secured party, or a secondary obligor would have brought.
(b) Non-consumer transactions; no inference. The limitation of the rules in subsection (a) of this section to transactions other than consumer transactions is intended to leave to the court the determination of the proper rules in consumer transactions. The court may not infer from that limitation the nature of the proper rule in consumer transactions and may continue to apply established approaches.
§46-9-627. Determination of whether conduct was commercially reasonable.

(a) Greater amount obtainable under other circumstances; no preclusion of commercial reasonableness. The fact that a greater amount could have been obtained by a collection, enforcement, disposition or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition or acceptance was made in a commercially reasonable manner.
(b) Dispositions that are commercially reasonable. A disposition of collateral is made in a commercially reasonable manner if the disposition is made:
(1) In the usual manner on any recognized market;
(2) At the price current in any recognized market at the time of the disposition; or
(3) Otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.
(c) Approval by court or on behalf of creditors. A collection, enforcement, disposition, or acceptance is commercially reasonable if it has been approved:
(1) In a judicial proceeding;
(2) By a bona fide creditors' committee;
(3) By a representative of creditors; or
(4) By an assignee for the benefit of creditors.
(d) Approval under subsection (c) not necessary; absence of approval has no effect. Approval under subsection (c) of this section need not be obtained and lack of approval does not mean that the collection, enforcement, disposition or acceptance is not commercially reasonable.
§46-9-628. Nonliability and limitation on liability of secured party; liability of secondary obligor.

(a) Limitation of liability of secured party for noncompliance with article. Unless a secured party knows that a person is a debtor or obligor, knows the identity of the person and knows how to communicate with the person:
(1) The secured party is not liable to the person, or to a secured party or lienholder that has filed a financing statement against the person, for failure to comply with this article; and
(2) The secured party's failure to comply with this article does not affect the liability of the person for a deficiency.
(b) Limitation of liability based on status as secured party. A secured party is not liable because of its status as secured party:
(1) To a person that is a debtor or obligor, unless the secured party knows:
(A) That the person is a debtor or obligor;
(B) The identity of the person; and
(C) How to communicate with the person; or
(2) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:
A) That the person is a debtor; and
(B) The identity of the person.
(c) Limitation of liability if reasonable belief that transaction not a consumer-goods transaction or consumer transaction. A secured party is not liable to any person, and a person's liability for a deficiency is not affected, because of any act or omission arising out of the secured party's reasonable belief that a transaction is not a consumer-goods transaction or a consumer transaction or that goods are not consumer goods, if the secured party's belief is based on its reasonable reliance on:
(1) A debtor's representation concerning the purpose for which collateral was to be used, acquired or held; or
(2) An obligor's representation concerning the purpose for which a secured obligation was incurred.
(d) Limitation of liability for statutory damages. A secured party is not liable to any person under section 9-625(c)(2) for its failure to comply with section 9-616.
(e) Limitation of multiple liability for statutory damages. A secured party is not liable under section 9-625(c)(2) more than once with respect to any one secured obligation.
PART 7. TRANSITION.

§46-9-701. Effective date.
This article takes effect on the first day of July, two thousand one.
§46-9-702. Savings clause.
(a) Pre-effective-date transactions or liens. Except as otherwise provided in this part, this article applies to a transaction or lien within its scope, even if the transaction or lien was entered into or created before this article takes effect.
(b) Continuing validity. Except as otherwise provided in subsection (c) of this section and sections 9-703 through 9-709:
(1) Transactions and liens that were not governed by former article nine, were validly entered into or created before this article takes effect and would be subject to this article if they had been entered into or created after this article takes effect, and the rights, duties and interests flowing from those transactions and liens remain valid after this article takes effect; and
(2) The transactions and liens may be terminated, completed, consummated and enforced as required or permitted by this article or by the law that otherwise would apply if this article had not taken effect.
(c) Pre-effective-date proceedings. This article does not affect an action, case or proceeding commenced before this article takes effect.
§46-9-703. Security interest perfected before effective date.
(a) Continuing priority over lien creditor: perfection requirements satisfied. A security interest that is enforceable immediately before this article takes effect and would have priority over the rights of a person that becomes a lien creditor at that time is a perfected security interest under this article if, when this article takes effect, the applicable requirements for enforceability and perfection under this article are satisfied without further action.
(b) Continuing priority over lien creditor: perfection requirements not satisfied. Except as otherwise provided in section 9-705, if, immediately before this article takes effect, a security interest is enforceable and would have priority over the rights of a person that becomes a lien creditor at that time, but the applicable requirements for enforceability or perfection under this article are not satisfied when this article takes effect, the security interest:
(1) Is a perfected security interest for two years after this article takes effect;
(2) Remains enforceable thereafter only if the security interest becomes enforceable under section 9-203 before the second year expires; and
(3) Remains perfected thereafter only if the applicable requirements for perfection under this article are satisfied before the second year expires.
§46-9-704. Security interest unperfected before effective date. A security interest that is enforceable immediately before this article takes effect but which would be subordinate to the rights of a person that becomes a lien creditor at that time:
(1) Remains an enforceable security interest for two years after this article takes effect;
(2) Remains enforceable thereafter if the security interest becomes enforceable under section 9-203 when this article takes effect or within two years thereafter; and
(3) Becomes perfected:
(A) Without further action, when this article takes effect if the applicable requirements for perfection under this article are satisfied before or at that time; or
(B) When the applicable requirements for perfection are satisfied if the requirements are satisfied after that time.
§46-9-705. Effectiveness of action taken before effective date.
(a) Pre-effective-date action; two-year perfection period unless reperfected. If action, other than the filing of a financing statement, is taken before this article takes effect and the action would have resulted in priority of a security interest over the rights of a person that becomes a lien creditor had the security interest become enforceable before this article takes effect, the action is effective to perfect a security interest that attaches under this article within two years after this article takes effect. An attached security interest becomes unperfected two years after this article takes effect unless the security interest becomes a perfected security interest under this article before the expiration of that period.
(b) Pre-effective-date filing. The filing of a financing statement before this article takes effect is effective to perfect a security interest to the extent the filing would satisfy the applicable requirements for perfection under this article.
(c) Pre-effective-date filing in jurisdiction formerly governing perfection. This article does not render ineffective an effective financing statement that, before this article takes effect, is filed and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in former section 9-103. However, except as otherwise provided in subsections (d) and (e) of this section and section 9- 706, the financing statement ceases to be effective at the earlier of:
(1) The time the financing statement would have ceased to be effective under the law of the jurisdiction in which it is filed; or
(2) The thirtieth day of June, two thousand six.
(d) Continuation statement. The filing of a continuation statement after this article takes effect does not continue the effectiveness of the financing statement filed before this article takes effect. However, upon the timely filing of a continuation statement after this article takes effect and in accordance with the law of the jurisdiction governing perfection as provided in part 3, the effectiveness of a financing statement filed in the same office in that jurisdiction before this article takes effect continues for the period provided by the law of that jurisdiction.
(e) Application of subsection (c)(2) to transmitting utility financing statement. Subsection (c)(2) of this section applies to a financing statement that, before this article takes effect, is filed against a transmitting utility and satisfies the applicable requirements for perfection under the law of the jurisdiction governing perfection as provided in former section 9-103 only to the extent that part 3 provides that the law of a jurisdiction other than jurisdiction in which the financing statement is filed governs perfection of a security interest in collateral covered by the financing statement.
(f) Application of part 5. A financing statement that includes a financing statement filed before this article takes effect and a continuation statement filed after this article takes effect is effective only to the extent that it satisfies the requirements of part 5 for an initial financing statement.
§46-9-706. When initial financing statement suffices to continue effectiveness of financing statement.

(a) Initial financing statement in lieu of continuation statement. The filing of an initial financing statement in the office specified in section 9-501 continues the effectiveness of a financing statement filed before this article takes effect if:
(1) The filing of an initial financing statement in that office would be effective to perfect a security interest under this article;
(2) The pre-effective-date financing statement was filed in an office in another state or another office in this state; and
(3) The initial financing statement satisfies subsection (c) of this section.
(b) Period of continued effectiveness. The filing of an initial financing statement under subsection (a) of this section continues the effectiveness of the pre-effective-date financing statement:
(1) If the initial financing statement is filed before this article takes effect, for the period provided in former section 9- 403 with respect to a financing statement; and
(2) If the initial financing statement is filed after this article takes effect, for the period provided in section 9-515 with respect to an initial financing statement.
(c) Requirements for initial financing statement under subsection (a). To be effective for purposes of subsection (a) of this section, an initial financing statement must:
(1) Satisfy the requirements of part 5 for an initial financing statement;
(2) Identify the pre-effective-date financing statement by indicating the office in which the financing statement was filed and providing the dates of filing and file numbers, if any, of the financing statement and of the most recent continuation statement filed with respect to the financing statement; and
(3) Indicate that the pre-effective-date financing statement remains effective.
§46-9-707. Amendment of pre-effective-date financing statement.

(a) "Pre-effective-date financing statement". In this section, "pre-effective-date financing statement" means a financing statement filed before this article takes effect.
(b) Applicable law. After this article takes effect, a person may add or delete collateral covered by, continue or terminate the effectiveness of, or otherwise amend the information provided in, a pre-effective-date financing statement only in accordance with the law of the jurisdiction governing perfection as provided in part 3. However, the effectiveness of a pre-effective-date financing statement also may be terminated in accordance with the law of the jurisdiction in which the financing statement is filed.
(c) Method of amending: general rule. Except as otherwise provided in subsection (d) of this section, if the law of this state governs perfection of a security interest, the information in a pre-effective-date financing statement may be amended after this article takes effect only if:
(1) The pre-effective-date financing statement and an amendment are filed in the office specified in section 9-501'
(2) An amendment is filed in the office specified in section 9-501 concurrently with, or after the filing in that office of, an initial financing statement that satisfies section 9-706(c); or
(3) An initial financing statement that provides the information as amended and satisfies section 9-706(c) is filed in the office specified in section 9-501.
(d) Method of amending: continuation. If the law of this state governs perfection of a security interest, the effectiveness of a pre-effective-date financing statement may be continued only under section 9-705(d) and (f) or 9-706.
(e) Method of amending: additional termination rule. Whether or not the law of this state governs perfection of a security interest, effectiveness of a pre-effective-date financing statement filed in this state may be terminated after this article takes effect by filing a termination statement in the office in which the pre-effective-date financing statement is filed, unless an initial financing statement that satisfies section 9-706(c) has been filed in the office specified by the law of the jurisdiction governing perfection as provided in part 3 as the office in which to file a financing statement.
§46-9-708. Persons entitled to file initial financing statement or continuation statement.
A person may file an initial financing statement or a continuation statement under this part if:
(1) The secured party of record authorizes the filing; and
(2) The filing is necessary under this part:
(A) To continue the effectiveness of a financing statement filed before this article takes effect; or
(B) To perfect or continue the perfection of a security interest.
§46-9-709. Priority.
(a) Law governing priority. This article determines the priority of conflicting claims to collateral. However, if the relative priorities of the claims were established before this article takes effect, former article nine determines priority.
(b) Priority if security interest becomes enforceable under section 9-203. For purposes of section 9-322(a), the priority of a security interest that becomes enforceable under section 9-203 of this article dates from the time this article takes effect if the security interest is perfected under this article by the filing of a financing statement before this article takes effect which would not have been effective to perfect the security interest under former article nine. This subsection does not apply to conflicting security interests each of which is perfected by the filing of such a financing statement.
CHAPTER 46A. WEST VIRGINIA CONSUMER CREDIT AND PROTECTION ACT.

ARTICLE 2. CONSUMER CREDIT PROTECTION.
§46A-2-119a. Secured transaction; use of price guide value in calculating deficiency or surplus.

(a) This section applies to the following transactions:
(1) Transactions in which a purchase money security interest is taken in collateral which is being purchased primarily for a personal, family, household or agricultural purpose;
(2) Transactions in which a security interest is taken in collateral which was used primarily for a personal, family, household or agricultural purpose prior to the giving the security interest; or
(3) Transactions in which a security interest is taken in collateral for a debt that was incurred primarily for a personal, family, household or agricultural purpose.
(b) This section takes effect on the first day of July, two thousand two, and is applicable notwithstanding the provisions of:
(1) Section six hundred ten, article nine, chapter forty-six of this code, providing that disposition may only be by certain public or private sale, lease or license procedures;
(2) Section six hundred ten, article nine, chapter forty-six of this code, requiring that those procedures be commercially reasonable;
(3) Section six hundred fifteen, article nine, chapter forty- six of this code, providing for the application of the proceeds;
(4) Section six hundred twenty, article nine, chapter forty- six of this code, requiring disposition by sale, lease or license in certain circumstances; and
(5) Section six hundred two, article nine, chapter forty-six of this code, providing that these sections may not be waived or varied by agreement.
(c) For purposes of this section, the term "debtor" shall be deemed to refer collectively to each person who is indebted to a secured creditor in connection with a consumer lease or consumer loan, whether the person's obligation arises as a co-maker, endorser or guarantor of the lease or loan.
(d) After a default by the debtor and after the secured creditor takes or receives possession of collateral or makes collateral unusable as provided in section six hundred nine, article nine, chapter forty-six of this code, the secured creditor may send a written proposal to the debtor setting forth a value for the secured creditor's collateral which value, less any expenses of taking and holding the collateral, shall be credited against the debtor's obligation to the secured creditor. The written proposal must explain that:
(1) The proposal becomes effective only if the debtor agrees to it in writing but the debtor is not required to agree to the written proposal;
(2) If the debtor does not agree to the proposal in writing, then the goods which are the subject of the written proposal will be disposed of in a "commercially reasonable" manner by the secured creditor in accordance with applicable law, and the amount received from the disposition of the collateral, less the expenses of taking and holding the collateral, preparing the collateral of the sale or lease, and selling the collateral, will be the amount credited against the debtor's obligation to the secured creditor when calculating the deficiency owed by the debtor to the secured creditor or the surplus owed by the secured creditor to the debtor;
(3) If the debtor agrees to the written proposal, then the debtor will thereby release and waive any claims against the secured creditor that the disposition of the collateral was not commercially reasonable or was otherwise improper; and
(4) The written proposal may set forth a date and time by which the debtor's written agreement must be received by secured creditor in order for the agreement to become effective.
(5) The following form, when reproduced on a single sheet of paper with no other statements or agreements and accurately completed, meets the requirements of this section even if it contains typographical or other minor errors that are not misleading:
[Name and address of secured party]
[Date]
TO: [Name and address of debtor]
OFFER TO CREDIT PRICE GUIDE VALUE

We have possession of your [describe collateral] ("property") (or we have made it unusable by you), because you broke the terms of our agreement.
By law, we may sell, lease or license this property in any commercially reasonable manner. If we choose to sell the property at a public sale we will give you notice of the date, time and place of the sale and you may attend the sale and bring bidders if you want. If we choose to sell the property at a private sale we will give you notice of the date after which the sale will take place. From the money we are paid from the sale of the property, we may subtract our expenses in getting the property from you, storing it, preparing and selling, leasing or licensing it. The sale money left over after these expenses are subtracted will then be subtracted from what you owe us. If we receive less money than you owe, you will still owe us the difference. If we receive more money than you owe, you will get the extra money back (unless we are required to pay it to someone else).
Instead of selling, leasing or licensing this property, we are now offering to subtract the amount of $ [enter amount] from what you owe us. We have calculated this amount by adding the retail value of the property of $ [insert retail value] and the [insert other value pursuant to § 46A-2-119a(5)] value of the property of $ [enter amount] and dividing that total by 2 ("value amount"). These values were obtained from _____________, a price guide in general use as of the date we got possession of or rendered the property unusable by you. From the value amount we have subtracted our expenses of $ [enter amount] in taking back the property from you, and our expenses of $ [enter amount] for storing the property through the date below by which you must respond to this offer.
You do not have to accept this offer. To agree to our offer, you must sign this notice at the bottom no sooner than one day after the date on which you received this offer and deliver it or have it delivered to us before [enter date by which the secured party determines the offer must be accepted] . If you agree to this offer, you are giving up any right to hold us liable for the way that we sell, lease or otherwise dispose of the property and account for the proceeds.
You can get the property back at any time before you accept this offer or we sell, lease or license the property by paying us the full amount you owe (not just the past due payments), including our expenses so far. To learn the exact amount you must pay, you may call us at [telephone number] . If you want us to explain to you in writing how we calculated the amount that you owe us, you may call us at [telephone number] or write us at [secured party's address] and request a written explanation.
[We are sending this notice to the following other people who owe money under our agreement. They will also have to agree to our offer or we will sell the property as we normally do.

[Names of all other debtors and obligors, if any]]
I accept the offer:
Signed ___________________________
Date of signature ___________________
[End of Form]

(e) (1) The value of the collateral set forth in the written proposal shall be determined from any price guide used generally by persons who are not purchasers or lessees of that type of collateral and who insure, lend money for the purchase of, lease or otherwise deal in goods of the same type as the collateral when it would be to the advantage of the user for the price guide to have higher values.
(2) The value of the collateral set forth in the written proposal shall be determined as of the date the secured party took possession of the collateral, received possession of the collateral or rendered the collateral unusable.
(3) For a motor vehicle, as that term is defined by section one, article one, chapter seventeen-a of this code, the value of the motor vehicle collateral shall be calculated by adding together the retail value and the trade-in value for the motor vehicle and dividing that sum by two.
(4) For a manufactured home, mobile home or house trailer, as those terms are defined in section one, article six, chapter seventeen-a of this code, which at the time of default was located on a lot owned by the debtor, an obligor or a person related to the debtor, the value of the manufactured home, mobile home or house trailer collateral shall be calculated by adding together the retail value and the wholesale value designated for the manufactured home that is moved for resale, mobile home or house trailer and dividing that sum by two.
(5) For a manufactured home, mobile home or house trailer, as those terms are defined in section one, article six, chapter seventeen-a of this code, which at the time of default was located on a lot owned by a person or organization in the business of renting or leasing lots or on a lot owned by a person who is not the debtor, an obligor or a person related to the debtor or obligor, the value of the manufactured home, mobile home or house trailer collateral shall be calculated by adding together the retail value and the wholesale value designated for collateral that is offered for sale without moving the collateral from its current location, and dividing that sum by two.
(6) For other personal property, the value of the collateral shall be calculated by adding together the used retail value and the highest listed wholesale value for the property and dividing that sum by two.
(f) If the debtor agrees in writing to the written proposal within the time period prescribed by the secured creditor, then:
(1) The collateral value as calculated in subsection (e) above, less any expenses of taking and holding the collateral, shall be applied to the indebtedness as provided in section six hundred fifteen, article nine, chapter forty-six of this code;
(2) Any expenses incurred by the secured creditor in the actual sale or lease of the collateral or preparing the collateral for sale or lease may not be charged to the debtor but must be born by the secured creditor; and
(3) The secured creditor is not required to dispose of the collateral in a commercially reasonable manner and is not liable for any failure to comply with any law of this state relating to the disposition of the collateral or application of the proceeds.
(g) The written agreement of the debtor is not valid unless it is signed by the debtor on or after the next calendar day after it is received by the debtor or the second calendar day after it was sent to the debtor.
(h) If the debtor is more than one person, then the secured creditor must send the proposal described in subsection (d) of this section to all such persons. If any one of the persons indebted to a secured creditor on a consumer lease or consumer loan does not agree in writing to the proposal or does not respond timely to the proposal, then the secured creditor must proceed with a sale or other disposition of its collateral as provided in article nine, chapter forty-six of this code.
(i) If a person other than the debtor has a recorded ownership interest in property securing the debtor's obligation to a secured creditor and such other person is not also indebted to the secured creditor on such obligation, then the secured creditor must send a copy of the proposal described in subsection (d) of this section to such other person but is not required to obtain such other person's consent or agreement to the proposal in order to effect the proposal.
(j) Upon receipt of the debtor's executed acceptance of a written proposal described in subsection (d) of this section, title to the collateral described in the proposal shall be deemed to pass to the secured creditor unless such collateral is a vehicle, manufactured home, mobile home or house trailer.
(k) Upon presentation of the debtor's executed acceptance of a written proposal described in subsection (d) of this section to the department of motor vehicles and a certificate of title to the debtor's vehicle, manufactured home, mobile home or house trailer described in the written proposal, the department of motor vehicles shall issue a new certificate of title to the vehicle, manufactured home, mobile home or house trailer in the name of the secured creditor as the owner thereof.
(l) Nothing in this section may be construed to create, directly or indirectly, or impose a duty on the secured creditor to make a written offer or give notice under this section. A secured creditor's failure to make a written proposal shall not subject the secured creditor to any liability to the debtor or any other person.
(m) The provisions of this section may not be waived or varied.