Louisiana Revised Statutes 10:9-607 – Collection and enforcement by secured party
Terms Used In Louisiana Revised Statutes 10:9-607
- Contract: A legal written agreement that becomes binding when signed.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- person: includes a body of persons, whether incorporated or not. See Louisiana Revised Statutes 1:10
- Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
(a) Collection and enforcement generally. 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 La. Rev. Stat. 10:9-315;
(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 La. Rev. Stat. 10:9-104(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 La. Rev. Stat. 10:9-104(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) [Reserved.]
(c) Commercially reasonable collection and enforcement. 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) Expenses of collection and enforcement. A secured party may deduct from the collections made pursuant to Subsection (c) reasonable expenses of collection and enforcement, including reasonable attorney’s fees and legal expenses incurred by the secured party.
(e) Duties to secured party not affected. This Section does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.
(f) Summary process. A secured party may proceed by summary process against the debtor to obtain any instrument, contract, receipt, or other document in order to exercise its rights under this Chapter or to obtain the endorsement of the debtor to any instrument or other document.
Acts 2001, No. 128, §1, eff. July 1, 2001.