16a-5-103.   (UCCC) Restrictions on deficiencyjudgments.(1) This section applies to a deficiency on a consumer credit sale ofgoods or services and on a consumer loan in which the lender is subject todefenses arising from sales (K.S.A. 16a-3-405, andamendments thereto); a consumer is not liablefor a deficiency unless the creditor has disposed of the goods in goodfaith and in a commercially reasonable manner.

      (2)   If the seller repossesses or voluntarily accepts surrender of goodswhich were the subject of the sale and in which he has a security interest,the buyer is not personally liable to the seller for the unpaid balance ofthe debt arising from the sale of a commercial unit of goods of which thecash sale price was $1,000 or less,and the selleris not obligated to resell the collateral unless the buyer has paid 60%or more of the cash price and has not signed afterdefault astatement renouncing his rights in the collateral.

      (3)   If the seller repossesses or voluntarily accepts surrender of goodswhich were not the subject of the sale but in which the sellerhas a securityinterest to secure a debt arising from a sale of goods or services or acombined sale of goods and services and the cash price of the sale was$1,000 or less, the buyer is notpersonally liable tothe seller for the unpaid balance of the debt arising from the sale, andthe seller's duty to dispose of the collateral is governed by theprovisions on disposition of collateral (K.S.A.84-9-610, and amendments thereto) of the uniformcommercial code.

      (4)   If the lender takes possession or voluntarily accepts surrender ofgoods in which he has a security interest to secure a debt arising from aconsumer loan in which the lender is subject to defenses arising from sales(K.S.A. 16a-3-405, and amendments thereto) and thenet proceeds of the loan paidto or for thebenefit of the debtor were $1,000or less, thedebtor is not personally liable to the lender for the unpaid balance of thedebt arising from the loan and the lender's duty to dispose of thecollateral is governed by the provisions on disposition of collateral(K.S.A. 84-9-610, and amendments thereto) of theuniform commercial code.

      (5)   For the purpose of determining the unpaid balance of consolidateddebts or debts pursuant to open end credit, the allocation of payments to adebt shall be determined in the same manner as provided for determining theamount of debt secured by various security interests (K.S.A. 16a-3-303, andamendments thereto).

      (6)   The consumer may be liable in damages to the creditor if theconsumer has wrongfully damaged the collateral or if, after default anddemand, the consumer has wrongfully failed to make the collateral availableto the creditor.

      (7)   If the creditor elects to bring an action against the consumer for adebt arising from a consumer credit sale of goods or services or from aconsumer loan in which the lender is subject to defenses arising from sales(K.S.A. 16a-3-405, and amendments thereto), whenunder this section the creditor would not be entitled to adeficiency judgment if the creditor took possession of thecollateral, and obtainsjudgment:

      (a)   The creditor may not take possession of the collateral,and

      (b)   the collateral is not subject to levy or sale on execution orsimilar proceedings pursuant to the judgment.

      History:   L. 1973, ch. 85, § 82;L. 2005, ch. 144, § 16; July 1.