Secured Transactions:

The State of Colorado generally adopts the provisions of the Uniform Commercial Code in secured transactions. (C.R.S. 4-9-101, et seq.)

A creditor generally is entitled to recover possession of collateral upon the default of a debtor on a secured transaction. In obtaining possession of collateral, a creditor may do so without judicial process if it can be done without breach of the peace or by judicial action. (C.R.S. 4-9-503(1).)  However, a secured party or such party's assignee who wishes to recover or take possession of collateral upon default, including a motor vehicle repossessed pursuant to section 42-6-146, C.R.S., must contract to recover or take possession of collateral only with a person who is bonded for property damage to or conversion of such collateral in the amount of $25,000.00.   Failure to comply with this requirement may render the secured party liable for damages, as a principal, even if the relationship between the secured party and the repossessor is that of an independent contractor. (C.R.S. 4-9-503(2), (3).)

After a debtor's default, a secured creditor may sell, lease or otherwise dispose of the collateral in a commercially reasonable manner. (C.R.S. 4-9-504.) Any time before the disposition of the collateral, a debtor may have a right to redeem the collateral by tendering full payment of the obligation owed and all reasonable expenses incurred by the creditor. (C.R.S.  4-9-506.)

The disposition of the collateral may be conducted by public or private sale. Reasonable notice of the time and place of the sale is generally required to be given to other secured creditors and the debtor. (C.R.S. 4-9-504(3).) A creditor must account to the debtor any surplus, and unless otherwise agreed, the debtor may be liable for any deficiency. (C.R.S. 4-9-502(2).)  However, in a consumer credit sale of goods or services transaction, the debtor may not be responsible for any deficiency amount if the creditor repossess the collateral or voluntarily accepts surrender of goods which were the subject of the sale and in which he has a secured interest, and the cash sale price of the goods is $2,100.00 or less.  (C.R.S. 5-5-103.)

Lawdog assumes  no responsibility for links away from this site.

Copyright © 1998 by LAWDOG.COM Publishing, Inc