(810 ILCS 5/9-608)
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
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 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 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 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)(C).
(3) A secured party need not apply or pay over for
application noncash proceeds of collection and enforcement under Section 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) 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
and the obligor is not liable for any deficiency.
(Source: P.A. 91-893, eff. 7-1-01.)