(a) If so agreed, and in any event after default, a secured party:
(1) May notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party;
(2) May take any proceeds to which the secured party is entitled under section 4-9-315;
(3) May enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral;
(4) If it holds a security interest in a deposit account perfected by control under section 4-9-104 (a)(1), may apply the balance of the deposit account to the obligation secured by the deposit account; and
(5) If it holds a security interest in a deposit account perfected by control under section 4-9-104 (a)(2) or (3), may instruct the bank to pay the balance of the deposit account to or for the benefit of the secured party.
(b) If necessary to enable a secured party to exercise under paragraph (3) of subsection (a) of this section the right of a debtor to enforce a mortgage nonjudicially, the secured party may record in the office in which a record of the mortgage is recorded:
(1) A copy of the security agreement that creates or provides for a security interest in the obligation secured by the mortgage; and
(2) The secured party's sworn affidavit in recordable form stating that:
(A) A default has occurred with respect to the obligation secured by the mortgage; and
(B) The secured party is entitled to enforce the mortgage nonjudicially.
(c) A secured party shall proceed in a commercially reasonable manner if the secured party:
(1) Undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral; and
(2) Is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.
(d) A secured party may deduct from the collections made pursuant to subsection (c) of this section reasonable expenses of collection and enforcement, including reasonable attorney's fees and reasonable legal expenses incurred by the secured party.
(e) This section does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.
Source: L. 2001: Entire article R&RE, p. 1401, � 1, effective July 1. L. 2012: (b)(2)(A) amended, (HB 12-1262), ch. 170, p. 604, � 15, effective July 1, 2013.
Editor's note: This section is similar to former � 4-9-502 as it existed prior to 2001.
4-9-608. Application of proceeds of collection or enforcement - liability for deficiency and right to surplus. (a) 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 4-9-607 in the following order to:
(A) The reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and reasonable legal expenses incurred by the secured party;
(B) The satisfaction of obligations secured by the security interest or agricultural lien under which the collection or enforcement is made; and
(C) 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 a signed 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 subparagraph (C) of paragraph (1) of this subsection (a).
(3) A secured party need not apply or pay over for application noncash proceeds of collection and enforcement under section 4-9-607 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) 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.
Source: L. 2001: Entire article R&RE, p. 1402, � 1, effective July 1. L. 2023: (a)(1)(C) amended, (SB 23-090), ch. 136, p. 560, � 78, effective August 7.
Editor's note - Colorado legislative change: Colorado substituted the phrase section 4-9-607 for the phrase this section in subsections (a)(1) and (a)(3) and added the word reasonable in subsection (a)(1)(A).