2012 Pennsylvania Consolidated Statutes
Title 13 - COMMERCIAL CODE
Chapter 96 - Default
Section 9608 - Application of proceeds of collection or enforcement; liability for deficiency and right to surplus

     § 9608.  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 9607 (relating to collection and enforcement by
        secured party) in the following order to:
                (i)  the reasonable expenses of collection and
            enforcement and, to the extent provided for by agreement
            and not prohibited by law, reasonable attorney fees and
            legal expenses incurred by the secured party;
                (ii)  the satisfaction of obligations secured by the
            security interest or agricultural lien under which the
            collection or enforcement is made; and
                (iii)  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)(iii).
            (3)  A secured party need not apply or pay over for
        application noncash proceeds of collection and enforcement
        under section 9607 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.

        Cross References.  Section 9608 is referred to in section
     9602 of this title.