16a-3-303.   (UCCC) Debt secured by cross-collateral.(1) If debts arising from two or more consumer credit sales, other thansales pursuant to open endcredit, are secured by cross-collateral (section 16a-3-302) orconsolidated into one debt payable on a single schedule of payments, andthe debt is secured by security interests taken with respect to one ormore of the sales, payments received by the seller after the taking ofthe cross-collateral or the consolidation are deemed, for the purpose ofdetermining the amount of the debt secured by the various securityinterests, to have been first applied to the payment of the debtsarising from the sales first made. To the extent debts are paidaccording to this section, security interests in items of propertyterminate as the debts originally incurred with respect to each item ispaid.

      (2)   Payments received by the seller upon an open end credit accountare deemed, for the purpose of determining the amount of the debtsecured by the various security interests, to have been applied first tothe payment of finance charges in the order of their entry to theaccount and then to the payment of debts in the order in which theentries to the account showing the debts were made.

      (3)   If the debts consolidated arose from two or more sales made onthe same day, payments received by the seller are deemed, for thepurpose of determining the amount of the debt secured by the varioussecurity interests, to have been applied first to the payment of thesmallest debt.

      History:   L. 1973, ch. 85, § 49; L. 1981, ch. 93, § 8; July 1.