{"data":{"id":"us-ky/krs-355.9-608","jurisdiction":"us-ky","citation":"KRS 355.9-608","heading":"Application of proceeds of collection or enforcement -- Liability for","body":"deficiency and right to surplus.\n(1) If a security interest or agricultural lien secures payment or performance of an\nobligation, the following rules apply:\n(a) A secured party shall apply or pay over for application the cash proceeds of\ncollection or enforcement under KRS 355.9-607 in the following order to:\n1. The reasonable expenses of collection and enforcement and, to the\nextent provided for by agreement and not  prohibited by law, reasonable\nattorney's fees and legal expenses incurred by the secured party;\n2. The satisfaction of obligations secured by the security interest or\nagricultural lien under which the collection or enforcement is made; and\n3. The satisfac tion of obligations secured by any subordinate security\ninterest in or other lien on the collateral subject to the security interest or\nagricultural lien under which the collection or enforcement is made if\nthe secured party receives a signed demand for pr oceeds before\ndistribution of the proceeds is completed;\n(b) If requested by a secured party, a holder of a subordinate security interest or\nother lien shall furnish reasonable proof of the interest or lien within a\nreasonable time. Unless the holder compl ies, the secured party need not\ncomply with the holder's demand under paragraph (a)3. of this subsection;\n(c) A secured party need not apply or pay over for application noncash proceeds\nof collection and enforcement under KRS 355.9 -607 unless the failure t o do\nso would be commercially unreasonable. A secured party that applies or pays\nover for application noncash proceeds shall do so in a commercially\nreasonable manner; and\n(d) A secured party shall account to and pay a debtor for any surplus, and the\nobligor is liable for any deficiency.\n(2) If the underlying transaction is a sale of accounts, chattel paper, payment\nintangibles, or promissory notes, the debtor is not entitled to any surplus, and the\nobligor is not liable for any deficiency.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=55707","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:49Z","sha256":"d3dcbbe36b6e1df60a980817def71fd005d0048c9bc500c082f061592faa1ccc","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.9-607","next":"us-ky/krs-355.9-609"},"notice":"GroundRules: Original legal text. Not legal advice."}