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Difference between revisions of "Creditors' Remedies against Debtors (10:III)"
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Creditors' Remedies against Debtors (10:III) (view source)
Revision as of 23:19, 17 August 2019
, 23:19, 17 August 2019→7. Disposal of Collateral
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After seizing collateral, the secured party under s 59(2) may dispose of it either in its present condition or after repairing it (though s 68(2) protects the debtor from incurring unnecessary expenses because all rights, etc., under the ''PPSA'' must be discharged “in good faith”). Further, s 59(3) provides that the secured party may dispose of the collateral by a private or public sale (either as a whole or in commercial units or parts) and, if the security agreement so provides, by lease. See also [[{{PAGENAME}}#10. Voluntary Foreclosure | Section II.A.10: Voluntary Foreclosure]]. | After seizing collateral, the secured party under s 59(2) may dispose of it either in its present condition or after repairing it (though s 68(2) protects the debtor from incurring unnecessary expenses because all rights, etc., under the ''PPSA'' must be discharged “in good faith”). Further, s 59(3) provides that the secured party may dispose of the collateral by a private or public sale (either as a whole or in commercial units or parts) and, if the security agreement so provides, by lease. See also [[{{PAGENAME}}#10. Voluntary Foreclosure | Section II.A.10: Voluntary Foreclosure]]. | ||
Section 59(2) provides a priority scheme regarding application of the proceeds of sale: first, toward the reasonable expenses of seizing, repairing, etc.; second, toward the satisfaction of the obligations owed to the secured party; and last, if any surplus exists, to the satisfaction of obligations owed to persons holding a subordinate security interest, and then toward the debtor (s 60). | Section 59(2) provides a priority scheme regarding application of the proceeds of sale: | ||
*first, toward the reasonable expenses of seizing, repairing, etc.; | |||
*second, toward the satisfaction of the obligations owed to the secured party; and | |||
*last, if any surplus exists, to the satisfaction of obligations owed to persons holding a subordinate security interest, and then toward the debtor (s 60). | |||
A person who buys an item from a disposal sale takes the good free and clear of the debtor, the secured party, and any subordinate creditors whether or not the secured party complied with the requirements of the section. In the case of a prior secured creditor’s interest, if the goods are “consumer goods” of a value less than $1,000 and the purchaser gave value for the goods, the purchaser takes them free of the prior secured creditor’s interest (see s 59(14)). | A person who buys an item from a disposal sale takes the good free and clear of the debtor, the secured party, and any subordinate creditors whether or not the secured party complied with the requirements of the section. In the case of a prior secured creditor’s interest, if the goods are “consumer goods” of a value less than $1,000 and the purchaser gave value for the goods, the purchaser takes them free of the prior secured creditor’s interest (see s 59(14)). | ||
=== 8. Notice of Intention to Dispose of Collateral === | === 8. Notice of Intention to Dispose of Collateral === | ||