§ 25-9-607. Collection and enforcement by secured party. - North Carolina Statutes

§ 25‑9‑607. Collection and enforcement by secured party.

(a)        Collection andenforcement generally. – If so agreed, and in any event after default, asecured party:

(1)        May notify anaccount debtor or other person obligated on collateral to make payment orotherwise render performance to or for the benefit of the secured party;

(2)        May take anyproceeds to which the secured party is entitled under G.S. 25‑9‑315;

(3)        May enforce theobligations of an account debtor or other person obligated on collateral andexercise the rights of the debtor with respect to the obligation of the accountdebtor or other person obligated on collateral to make payment or otherwiserender performance to the debtor, and with respect to any property that securesthe obligations of the account debtor or other person obligated on thecollateral;

(4)        If it holds asecurity interest in a deposit account perfected by control under G.S. 25‑9‑104(a)(1),may apply the balance of the deposit account to the obligation secured by thedeposit account; and

(5)        If it holds asecurity interest in a deposit account perfected by control under G.S. 25‑9‑104(a)(2)or (a)(3), may instruct the bank to pay the balance of the deposit account toor for the benefit of the secured party.

(b)        Nonjudicial enforcementof mortgage. – If necessary to enable a secured party to exercise undersubdivision (a)(3) of this section the right of a debtor to enforce a mortgagenonjudicially, the secured party may record in the office in which a record ofthe mortgage is recorded:

(1)        A copy of thesecurity agreement that creates or provides for a security interest in theobligation secured by the mortgage; and

(2)        The secured party'ssworn affidavit in recordable form stating that:

a.         A default hasoccurred; and

b.         The secured party isentitled to enforce the mortgage nonjudicially.

(c)        Commerciallyreasonable collection and enforcement. – A secured party shall proceed in acommercially reasonable manner if the secured party:

(1)        Undertakes tocollect from or enforce an obligation of an account debtor or other personobligated on collateral; and

(2)        Is entitled tocharge back uncollected collateral or otherwise to full or limited recourseagainst the debtor or a secondary obligor.

(d)        Expenses ofcollection and enforcement. – A secured party may deduct from the collectionsmade pursuant to subsection (c) of this section reasonable expenses ofcollection and enforcement, including reasonable attorney's fees and legalexpenses incurred by the secured party.

(e)        Duties to secured partynot affected. – This section does not determine whether an account debtor,bank, or other person obligated on collateral owes a duty to a secured party. (1961,c. 574; 1965, c. 700, s. 1; 1975, c. 862, s. 7; 2000‑169, s. 1.)