State of Illinois
90th General Assembly
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90_HB1412

      810 ILCS 5/9-507          from Ch. 26, par. 9-507
          Amends the Secured Transactions Article  of  the  Uniform
      Commercial Code.  In  provisions giving the debtor a right to
      recover  an  amount  not  less than the credit service charge
      plus 10% of the principal amount of  the  debt  or  the  time
      price  differential  plus  10%  of  the  cash  price  if  the
      collateral  is  consumer  goods  and the secured party is not
      proceeding in accordance with this Article regarding  secured
      transactions,  provides  that  the  debtor  can recover in an
      individual action.  Effective immediately.
                                                     LRB9004774SMdv
                                               LRB9004774SMdv
 1        AN ACT to amend the Uniform Commercial Code  by  changing
 2    Section 9-507.
 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:
 5        Section 5.  The Uniform Commercial  Code  is  amended  by
 6    changing Section 9-507 as follows:
 7        (810 ILCS 5/9-507) (from Ch. 26, par. 9-507)
 8        Sec.  9-507.  Secured  party's  liability  for failure to
 9    comply with this part.
10        (1)  If it is established that the secured party  is  not
11    proceeding  in  accordance  with  the provisions of this Part
12    disposition may be ordered or restrained on appropriate terms
13    and conditions. If the disposition has occurred the debtor or
14    any  person  entitled  to  notification  or  whose   security
15    interest  has  been  made known to the secured party prior to
16    the disposition has a right to recover from the secured party
17    any loss caused by a failure to comply with the provisions of
18    this Part. If the collateral is consumer goods, the debtor in
19    an individual action has a right to recover in any  event  an
20    amount  not  less  than the credit service charge plus 10% of
21    the  principal  amount  of  the  debt  or  the   time   price
22    differential plus 10% of the cash price.
23        (2)  The  fact  that  a  better  price  could  have  been
24    obtained  by  a  sale  at  a different time or in a different
25    method from that selected by the  secured  party  is  not  of
26    itself  sufficient to establish that the sale was not made in
27    a commercially reasonable manner. If the secured party either
28    sells the collateral in the usual manner  in  any  recognized
29    market  therefor  or if he sells at the price current in such
30    market at the time of his sale or if he has otherwise sold in
31    conformity with reasonable commercial practices among dealers
                            -2-                LRB9004774SMdv
 1    in the type of property sold he has sold  in  a  commercially
 2    reasonable manner. The principles stated in the two preceding
 3    sentences  with  respect  to  sales  also  apply  as  may  be
 4    appropriate  to  other  types  of  disposition. A disposition
 5    which has been approved in any judicial proceeding or by  any
 6    bona fide creditors' committee or representative of creditors
 7    shall  conclusively  be deemed to be commercially reasonable,
 8    but this sentence does not indicate that  any  such  approval
 9    must  be  obtained  in any case nor does it indicate that any
10    disposition not so approved is not commercially reasonable.
11    (Source: Laws 1961, p. 2101.)
12        Section 99.  Effective date.  This Act takes effect  upon
13    becoming law.

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