Secured Transactions:

Puerto Rico did not adopt the Uniform Commercial Code; however,  certain articles of the UCC were adopted as Puerto Rico's Commercial Transactions Act.  (T.19, s401, et seq.)  Secured transactions are governed under T.19, s2001, et seq., of the Act.

A secured party generally has the right to take possession of the collateral without judicial process on default of a secured transaction, provided that in a consumer secured transaction, the secured party is required to give the debtor at least two (2) days written notice, via certified mail with return receipt requested,  to the last known address of the debtor, of its intent to take possession of the collateral.  A consumer security agreement must contain a notice to the debtor in the space immediately preceding the signature of the debtor as follows:

"NOTICE TO DEBTOR.  YOU ARE HEREBY NOTIFIED THAT THE
SECURED PARTY MAY AFTER ANY EVENT OF DEFAULT TAKE
POSSESSION OF THE COLLATERAL WITHOUT JUDICIAL PROCESS."

After taking possession of the collateral in a consumer secured transaction, the secured party must retain the same for a period of 30 days from the time of repossession to permit the debtor or his successor in interest to redeem the same.  The 2-day written notice must contain a description of the default committed by the debtor; the amounts necessary to redeem and reinstate the obligation secured by the collateral; and a telephone number or mailing address from which additional information concerning the obligation secured is available.  The form of notification may be as follows:

NOTICE OF SECURED PARTY'S PLAN
TO REPOSSESS COLLATERAL

        TO:  (Name of debtor as stated on the security agreement.)
        Address:  (Address of debtor as stated on the security agreement.)

Pay us our costs of retaking the collateral, all regular payments, including interest, that are overdue, and all late charges.  That amount is now about $__________, but that amount may change.  To learn the exact amount, call us at [telephone number] or write us at [address].  You will have to make this payment on or before [date].  If you make the payment, [You -- name of debtor] will have to keep on making the rest of the monthly payments"
 

Within 24 hours from repossession of a collateral in a consumer secured transaction, the secured party must send another written notice to the consumer debtor at his last known address, via certified mail with return receipt requested, identifying the names and addresses of the debtor and the secured party, respectively; containing a description of the collateral, date of repossession; and attaching a copy of the security agreement. (T.19, s2203.)

After a debtor's default, a secured creditor may sell, lease or otherwise dispose of the collateral in a commercially reasonable manner. (T.19, s2204(1).) 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. (T.19, s2206.)

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. (T.19, s2204(3).) A creditor must account to the debtor any surplus, and unless otherwise agreed, the debtor may be liable for any deficiency. (T.19, s2202(2).)
 

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