Under UCC Article 9, which balance can be litigated and collected?

Under UCC Article 9, which balance can be litigated and collected?

• A. None
• B. Interest
• C. Deficiency balances
• D. Equal payments

Answer: (C)

Under UCC Article 9, when a default occurs and the secured party repossesses or sells the collateral, the amount that can be litigated and collected is the deficiency—the remaining balance after the net proceeds from the sale are applied to the secured obligation. The creditor can sue for this deficiency to recover what still owes after the collateral’s sale, while any surplus from the sale would go to the debtor. Interest and other permitted costs are part of the overall debt, but the actionable amount is the deficiency that remains after applying sale proceeds. That’s why the correct focus is on deficiency balances.

Under UCC Article 9, when a default occurs and the secured party repossesses or sells the collateral, the amount that can be litigated and collected is the deficiency—the remaining balance after the net proceeds from the sale are applied to the secured obligation. The creditor can sue for this deficiency to recover what still owes after the collateral’s sale, while any surplus from the sale would go to the debtor. Interest and other permitted costs are part of the overall debt, but the actionable amount is the deficiency that remains after applying sale proceeds. That’s why the correct focus is on deficiency balances.