State Codes and Statutes

Statutes > Illinois > Chapter810 > 2301 > 081000050HArt_9_Pt_6_Sub_1


      (810 ILCS 5/Art. 9 Pt. 6 Sub. 1 heading)
SUBPART 1. DEFAULT AND ENFORCEMENT
OF SECURITY INTEREST

    (810 ILCS 5/9‑601)
    Sec. 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 7‑106, 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) are cumulative and may be exercised simultaneously.
    (d) Rights of debtor and obligor. Except as otherwise provided in subsection (g) 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 a 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 a judgment 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.
(Source: P.A. 95‑895, eff. 1‑1‑09.)

    (810 ILCS 5/9‑602)
    Sec. 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑603)
    Sec. 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) does not apply to the duty under Section 9‑609 to refrain from breaching the peace.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑604)
    Sec. 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), 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑605)
    Sec. 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑606)
    Sec. 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑607)
    Sec. 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) 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) 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑608)
    Sec. 9‑608. Application of proceeds of collection or enforcement; liability for deficiency and right to surplus.
    (a) Application of proceeds, surplus, and deficiency if obligation secured. If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:
        (1) A secured party shall apply or pay over for
     application the cash proceeds of collection or enforcement under Section 9‑607 in the following order to:
            (A) the reasonable expenses of collection and
         enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;
            (B) the satisfaction of obligations secured by
         the security interest or agricultural lien under which the collection or enforcement is made; and
            (C) the satisfaction of obligations secured by
         any subordinate security interest in or other lien on the collateral subject to the security interest or agricultural lien under which the collection or enforcement is made if the secured party receives an authenticated demand for proceeds before distribution of the proceeds is completed.
        (2) If requested by a secured party, a holder of a
     subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder complies, the secured party need not comply with the holder's demand under paragraph (1)(C).
        (3) A secured party need not apply or pay over for
     application noncash proceeds of collection and enforcement under Section 9‑607 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.
        (4) A secured party shall account to and pay a
     debtor for any surplus, and the obligor is liable for any deficiency.
    (b) No surplus or deficiency in sales of certain rights to payment. If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is not entitled to any surplus, and the obligor is not liable for any deficiency.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑609)
    Sec. 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):
        (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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑610)
    Sec. 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):
        (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) 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑611)
    Sec. 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), a secured party that disposes of collateral under Section 9‑610 shall send to the persons specified in subsection (c) 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,
         10 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:

State Codes and Statutes

Statutes > Illinois > Chapter810 > 2301 > 081000050HArt_9_Pt_6_Sub_1


      (810 ILCS 5/Art. 9 Pt. 6 Sub. 1 heading)
SUBPART 1. DEFAULT AND ENFORCEMENT
OF SECURITY INTEREST

    (810 ILCS 5/9‑601)
    Sec. 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 7‑106, 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) are cumulative and may be exercised simultaneously.
    (d) Rights of debtor and obligor. Except as otherwise provided in subsection (g) 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 a 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 a judgment 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.
(Source: P.A. 95‑895, eff. 1‑1‑09.)

    (810 ILCS 5/9‑602)
    Sec. 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑603)
    Sec. 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) does not apply to the duty under Section 9‑609 to refrain from breaching the peace.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑604)
    Sec. 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), 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑605)
    Sec. 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑606)
    Sec. 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑607)
    Sec. 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) 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) 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑608)
    Sec. 9‑608. Application of proceeds of collection or enforcement; liability for deficiency and right to surplus.
    (a) Application of proceeds, surplus, and deficiency if obligation secured. If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:
        (1) A secured party shall apply or pay over for
     application the cash proceeds of collection or enforcement under Section 9‑607 in the following order to:
            (A) the reasonable expenses of collection and
         enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;
            (B) the satisfaction of obligations secured by
         the security interest or agricultural lien under which the collection or enforcement is made; and
            (C) the satisfaction of obligations secured by
         any subordinate security interest in or other lien on the collateral subject to the security interest or agricultural lien under which the collection or enforcement is made if the secured party receives an authenticated demand for proceeds before distribution of the proceeds is completed.
        (2) If requested by a secured party, a holder of a
     subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder complies, the secured party need not comply with the holder's demand under paragraph (1)(C).
        (3) A secured party need not apply or pay over for
     application noncash proceeds of collection and enforcement under Section 9‑607 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.
        (4) A secured party shall account to and pay a
     debtor for any surplus, and the obligor is liable for any deficiency.
    (b) No surplus or deficiency in sales of certain rights to payment. If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is not entitled to any surplus, and the obligor is not liable for any deficiency.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑609)
    Sec. 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):
        (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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑610)
    Sec. 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):
        (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) 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑611)
    Sec. 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), a secured party that disposes of collateral under Section 9‑610 shall send to the persons specified in subsection (c) 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,
         10 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:

State Codes and Statutes

State Codes and Statutes

Statutes > Illinois > Chapter810 > 2301 > 081000050HArt_9_Pt_6_Sub_1


      (810 ILCS 5/Art. 9 Pt. 6 Sub. 1 heading)
SUBPART 1. DEFAULT AND ENFORCEMENT
OF SECURITY INTEREST

    (810 ILCS 5/9‑601)
    Sec. 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 7‑106, 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) are cumulative and may be exercised simultaneously.
    (d) Rights of debtor and obligor. Except as otherwise provided in subsection (g) 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 a 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 a judgment 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.
(Source: P.A. 95‑895, eff. 1‑1‑09.)

    (810 ILCS 5/9‑602)
    Sec. 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑603)
    Sec. 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) does not apply to the duty under Section 9‑609 to refrain from breaching the peace.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑604)
    Sec. 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), 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑605)
    Sec. 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑606)
    Sec. 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑607)
    Sec. 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) 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) 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑608)
    Sec. 9‑608. Application of proceeds of collection or enforcement; liability for deficiency and right to surplus.
    (a) Application of proceeds, surplus, and deficiency if obligation secured. If a security interest or agricultural lien secures payment or performance of an obligation, the following rules apply:
        (1) A secured party shall apply or pay over for
     application the cash proceeds of collection or enforcement under Section 9‑607 in the following order to:
            (A) the reasonable expenses of collection and
         enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;
            (B) the satisfaction of obligations secured by
         the security interest or agricultural lien under which the collection or enforcement is made; and
            (C) the satisfaction of obligations secured by
         any subordinate security interest in or other lien on the collateral subject to the security interest or agricultural lien under which the collection or enforcement is made if the secured party receives an authenticated demand for proceeds before distribution of the proceeds is completed.
        (2) If requested by a secured party, a holder of a
     subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder complies, the secured party need not comply with the holder's demand under paragraph (1)(C).
        (3) A secured party need not apply or pay over for
     application noncash proceeds of collection and enforcement under Section 9‑607 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.
        (4) A secured party shall account to and pay a
     debtor for any surplus, and the obligor is liable for any deficiency.
    (b) No surplus or deficiency in sales of certain rights to payment. If the underlying transaction is a sale of accounts, chattel paper, payment intangibles, or promissory notes, the debtor is not entitled to any surplus, and the obligor is not liable for any deficiency.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑609)
    Sec. 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):
        (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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑610)
    Sec. 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):
        (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) 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.
(Source: P.A. 91‑893, eff. 7‑1‑01.)

    (810 ILCS 5/9‑611)
    Sec. 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), a secured party that disposes of collateral under Section 9‑610 shall send to the persons specified in subsection (c) 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,
         10 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: