8.9A-607 - A-607. Collection and enforcement by secured party. - Virginia Statutes

§ 8.9A-607. Collection and enforcement by secured party.

(a) Collection and enforcement generally. If so agreed, and in any eventafter default, a secured party:

(1) may notify an account debtor or other person obligated on collateral tomake payment or otherwise render performance to or for the benefit of thesecured party;

(2) may take any proceeds to which the secured party is entitled under §8.9A-315;

(3) may enforce the obligations of an account debtor or other personobligated on collateral and exercise the rights of the debtor with respect tothe obligation of the account debtor or other person obligated on collateralto make payment or otherwise render performance to the debtor, and withrespect to any property that secures the obligations of the account debtor orother person obligated on the collateral;

(4) if it holds a security interest in a deposit account perfected by controlunder § 8.9A-104 (a) (1), may apply the balance of the deposit account to theobligation secured by the deposit account; and

(5) if it holds a security interest in a deposit account perfected by controlunder § 8.9A-104 (a) (2) or (3), may instruct the bank to pay the balance ofthe deposit account to or for the benefit of the secured party.

(b) Nonjudicial enforcement of mortgage. If necessary to enable a securedparty to exercise under subsection (a) (3) the right of a debtor to enforce amortgage nonjudicially, the secured party may record in the office in which arecord of the mortgage is recorded:

(1) a copy of the security agreement that creates or provides for a securityinterest in the obligation secured by the mortgage; and

(2) the secured party's sworn affidavit in recordable form stating that:

(A) a default has occurred; and

(B) the secured party is entitled to enforce the mortgage nonjudicially.

(c) Commercially reasonable collection and enforcement. A secured party shallproceed in a commercially reasonable manner if the secured party:

(1) undertakes to collect from or enforce an obligation of an account debtoror other person obligated on collateral; and

(2) is entitled to charge back uncollected collateral or otherwise to full orlimited recourse against the debtor or a secondary obligor.

(d) Expenses of collection and enforcement. A secured party may deduct fromthe collections made pursuant to subsection (c) reasonable expenses ofcollection and enforcement, including reasonable attorney's fees and legalexpenses incurred by the secured party.

(e) Duties to secured party not affected. This section does not determinewhether an account debtor, bank, or other person obligated on collateral owesa duty to a secured party.

(1964, c. 219, § 8.9-502; 1973, c. 509; 2000, c. 1007.)