810 ILCS 5/9-615
2021 Illinois Compiled Statutes|Chapter 810 - COMMERCIAL CODE|810 ILCS 5/ - Uniform Commercial Code.|Article 9 - Secured Transactions

Sec. 9-615.         Application of proceeds of disposition; liability for  deficiency and right to surplus.(a) Application of proceeds.  A secured party shall apply or pay  over for application the cash proceeds of disposition in the following order  to:(1) the reasonable expenses of retaking, holding,     preparing for disposition, processing, and disposing, 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;(2) the satisfaction of obligations secured by the     security interest or agricultural lien under which the disposition is made;(3) the satisfaction of obligations secured by any     subordinate security interest in or other subordinate lien on the collateral if:(A) the secured party receives from the holder of         the subordinate security interest or other lien an authenticated demand for proceeds before distribution of the proceeds is completed; and(B) in a case in which a consignor has an         interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor; and(4) a secured party that is a consignor of the     collateral if the secured party receives from the consignor an authenticated demand for proceeds before distribution of the proceeds is completed.(b) Proof of subordinate interest.  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 does so, the  secured party need not comply with the holder's demand under subsection (a)(3).(c) Application of noncash proceeds.  A secured party need not  apply or pay over for application noncash proceeds of disposition under this  Section 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.(d) Surplus or deficiency if obligation secured.  If the security  interest under which a disposition is made secures payment or performance of an  obligation, after making the payments and applications required by subsection (a)  and permitted by subsection (c):(1) unless subsection (a)(4) requires the secured     party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus; and(2) the obligor is liable for any deficiency.(e) 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:(1) the debtor is not entitled to any surplus; and(2) the obligor is not liable for any deficiency.(f) Calculation of surplus or deficiency in disposition to person  related to secured party.  The surplus or deficiency following a disposition is  calculated based on the amount of proceeds that would have been realized in a  disposition complying with this Part  and described in subsection  (f)(2) of this Section to  a transferee other than the secured party, a  person related to the secured party, or a secondary obligor if:(1) the transferee in the disposition is the secured     party, a person related to the secured party, or a secondary obligor; and(2) the amount of proceeds of the disposition is     significantly below the range of proceeds that would have been received from a complying disposition by a forced sale without reserve to a willing buyer other than the secured party, a person related to the secured party, or a secondary obligor.(g) Cash proceeds received by junior secured party.  A secured  party that receives cash proceeds of a disposition in good faith and without  knowledge that the receipt violates the rights of the holder of a security  interest or  other lien that is not subordinate to the security interest or agricultural  lien under  which the disposition is made:(1) takes the cash proceeds free of the security     interest or other lien;(2) is not obligated to apply the proceeds of the     disposition to the satisfaction of obligations secured by the security interest or other lien; and(3) is not obligated to account to or pay the holder     of the security interest or other lien for any surplus.   (Source: P.A. 91-893, eff. 7-1-01.)