Subject to a limited right of redemption by the borrower and
the possible claims of other lean or secured creditors.
The secured creditor will usually sell the repossessed property at a public or
private sale.
The proceeds of the sale will then be used to
reimburse the secured creditor for expenses incurred in doing
the repossession to satisfy the underlying obligation and
to satisfy the security interest in those subordinate to the reposessing creditor.
As with levying to satisfy a legal judgement any
surplus proceeds from the sale of the security are then paid to the debtor.
If an inadequate sum is produced, the secured party is entitled to
seek what's called a deficiency judgement for the balance due, and
in effect becomes an unsecured creditor with regard to that deficiency.
The entire process, which can occur without the need for
direct intervention by a court or
sheriff Is regulated by article nine of the uniform commercial code.
For example any public or
private sale must be accomplished in a commercially reasonable manner.
Basic debt or rights cannot be eroded by agreement with the creditor and
the creditor is given an extensive private remedies of the creditor
fails to comply with article nine.
The take home lessons here are number one, that judgments are not orders to pay,
and two, when you give a security interest in your property,
you're selling many of your due process rights.
And finally, number three, because surplus proceeds are returned
to the defendant a judgement or security interest holder cannot profit from seizing
more assets that are needed to satisfy the amount owed.