Title 11, Chapter 9, Section 608
Application of proceeds of collection or enforcement; liability for deficiency and right to surplus.
(a) Application of proceeds, surplus, and deficiency if obligation
secured. If a security interest or agricultural lien secures
payment or performance of an obligation, the following rules apply:
(1) A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under Code Section 11-9-607 in the following order to:
(A) The reasonable expenses of collection and enforcement 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;
(B) The satisfaction of obligations secured by the security
interest or agricultural lien under which the collection or
enforcement is made; and
(C) The satisfaction of obligations secured by any subordinate
security interest in or other lien on the collateral subject to
the security interest or agricultural lien under which the
collection or enforcement is made if the secured party receives
an authenticated demand for proceeds before distribution of the
proceeds is completed;
(2) 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
complies, the secured party need not comply with the holder's
demand under subparagraph (C) of paragraph (1) of this subsection;
(3) A secured party need not apply or pay over for application noncash proceeds of collection and enforcement under Code Section 11-9-607 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; and
(4) A secured party shall account to and pay a debtor for any
surplus, and the obligor is liable for any deficiency.
(b) 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, the debtor is not entitled
to any surplus, and the obligor is not liable for any deficiency.