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355.9-616 Explanation of calculation of surplus or deficiency.
(1)
(2)
(3)
In this section:
(a) "Explanation" means a writing that:
1.
States the amount of the surplus or deficiency;
2.
Provides an explanation in accordance with subsection (3) of this section
of how the secured party calculated the surplus or deficiency;
3.
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
4.
Provides a telephone number or mailing address from which additional
information concerning the transaction is available.
(b) "Request" means a record:
1.
Authenticated by a debtor or consumer obligor;
2.
Requesting that the recipient provide an explanation; and
3.
Sent after disposition of the collateral under KRS 355.9-610.
In a consumer-goods transaction in which the debtor is entitled to a surplus or a
consumer obligor is liable for a deficiency under KRS 355.9-615, the secured party
shall:
(a) Send an explanation to the debtor or consumer obligor, as applicable, after the
disposition and:
1.
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
2.
Within fourteen (14) days after receipt of a request; or
(b) In the case of a consumer obligor who is liable for a deficiency, within
fourteen (14) days after receipt of a request, send to the consumer obligor a
record waiving the secured party's right to a deficiency.
To comply with subsection (1)(a)2. of this section, a writing must provide the
following information in the following order:
(a) 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:
1.
If the secured party takes or receives possession of the collateral after
default, not more than thirty-five (35) days before the secured party
takes or receives possession; or
2.
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 (35) days before the disposition;
(b) The amount of proceeds of the disposition;
(c) The aggregate amount of the obligations after deducting the amount of
(4)
(5)
proceeds;
(d) 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;
(e) 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 (a) of this
subsection; and
(f) The amount of the surplus or deficiency.
A particular phrasing of the explanation is not required. An explanation complying
substantially with the requirements of subsection (1) of this section is sufficient,
even if it includes minor errors that are not seriously misleading.
A debtor or consumer obligor is entitled without charge to one (1) response to a
request under this section during any six (6) month period in which the secured
party did not send to the debtor or consumer obligor an explanation pursuant to
subsection (2)(a) of this section. The secured party may require payment of a charge
not exceeding twenty-five dollars ($25) for each additional response.
Effective: July 1, 2001
History: Created 2000 Ky. Acts ch. 408, sec. 134, effective July 1, 2001.
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