§ 9—616. Explanation of calculation of surplus or deficiency
(a) In this section:
(1) “Explanation” means a record that:
(A) states the amount of the surplus or deficiency;
(B) provides an explanation in accordance with subsection (c) of this section of how the
secured party calculated the surplus or deficiency;
(C) states, if applicable, that future debits, credits, charges, including additional
credit service charges or interest, rebates, and expenses may affect the amount of
the surplus or deficiency; and
(D) provides a telephone number or mailing address from which additional information concerning
the transaction is available.
(2) “Request” means a record:
(A) signed by a debtor or consumer obligor;
(B) requesting that the recipient provide an explanation; and
(C) sent after disposition of the collateral under section 9—610 of this title.
(b) In a consumer goods transaction in which the debtor is entitled to a surplus or a
consumer obligor is liable for a deficiency under section 9—615 of this title, the secured party shall:
(1) send an explanation to the debtor or consumer obligor, as applicable, after the disposition
and:
(A) before or when the secured party accounts to the debtor and pays any surplus or first
makes demand in a record on the consumer obligor after the disposition for payment
of the deficiency; and
(B) within 14 days after receipt of a request; or
(2) in the case of a consumer obligor who is liable for a deficiency, within 14 days after
receipt of a request, send to the consumer obligor a record waiving the secured party’s
right to a deficiency.
(c) To comply with subdivision (a)(1)(B) of this section, an explanation must provide
the following information in the following order:
(1) the aggregate amount of obligations secured by the security interest under which the
disposition was made, and, if the amount reflects a rebate of unearned interest or
credit service charge, an indication of that fact, calculated as of a specified date:
(A) if the secured party takes or receives possession of the collateral after default,
not more than 35 days before the secured party takes or receives possession; or
(B) if the secured party takes or receives possession of the collateral before default
or does not take possession of the collateral, not more than 35 days before the disposition;
(2) the amount of proceeds of the disposition;
(3) the aggregate amount of the obligations after deducting the amount of proceeds;
(4) the amount, in the aggregate or by type, and types of expenses, including expenses
of retaking, holding, preparing for disposition, processing, and disposing of the
collateral, and attorney’s fees secured by the collateral which are known to the secured
party and relate to the current disposition;
(5) the amount, in the aggregate or by type, and types of credits, including rebates of
interest or credit service charges, to which the obligor is known to be entitled and
which are not reflected in the amount in subdivision (1) of this subsection; and
(6) the amount of the surplus or deficiency.
(d) A particular phrasing of the explanation is not required. An explanation complying
substantially with the requirements of subsection (a) of this section is sufficient,
even if it includes minor errors that are not seriously misleading.
(e) A debtor or consumer obligor is entitled without charge to one response to a request
under this section during any six-month period in which the secured party did not
send to the debtor or consumer obligor an explanation pursuant to subdivision (b)(1)
of this section. The secured party may require payment of a charge not exceeding $25.00
for each additional response. (Added 1999, No. 106 (Adj. Sess.), § 2, eff. July 1, 2001; amended 2025, No. 17, § 9, eff. July 1, 2025.)