Bruce A. Atkins

COLLECTING DEBTS AND JUDGMENTS          UNIVERSITY OF HOUSTON LAW CENTER                        AUGUST 11 - 12, 1988 COURSE DIRECTOR: PROFESSOR DAVID CRUMP    ASSOCIATE DIRECTOR: CATHERINE OVERALL                           COPYRIGHT © 1988                University of Houston Law Center       UNIVERSITY OF HOUSTON LAW CENTER         COLLECTING DEBTS AND JUDGMENTS                                     1988                       AUGUST 11 - 12, 1988            SELF-HELP: THE LIMITS UNDER UCC-503

I. SCOPE OF THE ARTICLE

A. This article focuses on the right of secured creditors to repossess collateral in which they have a security interest and on the limits of secured creditors' repossession without judicial proceeding. More particularly, the article sets out the right to repossess, the manner of repos­session, the parties from whom collateral may be repossessed, and the place of repossession. The article distinguishes lawful from unlawful repos­session scenarios that have been decided by the courts. The seminal substantive law on this issue is Section 9-503 of the Uniform Commercial Code. The primary reference shall be the Texas Uniform Commercial Code (UCC), Tex. Bus. & Com. Code Ann. tit. 1 (Vernon Supp. 1988). Case law from the state of Texas and from other jurisdictions is cited where it is illustrative of respective principles.

B. There are several substantive areas related to but outside the scope of this article that you may wish to consult: disposition of collateral after repossession, Tex. Bus. & Com. Code Ann. §§9.504(a}, 9.505(a} (Vernon Supp. 1988); accounting for surplus/deficiency on sale of collateral, Tex. Bus. & Com. Code Ann. §§9.502(b), 9.504(b)(Vernon Supp. 1988;acceptance of collateral in discharge of obligation, Tex. Bus. & Com. Code Ann. §9-505(b) (Vernon Supp. 1988); voluntary turnover of collateral by debtor, See, e.g., Burton v. National Bank of Commerce of Dallas, 679 S. W. 2d 115 (Tex. Civ. App. - Dallas 1984, no writ; duties of secured party in possession of collateral, Tex. Bus.& Com. Code Ann. §9.207 (Vernon Supp. 1988; and liabilities of secured party for wrongful repossession, Tex. Bus. & Com. Code Ann. §9.507 (Vernon Supp. 1988).

II. BACKGROUND

A. Reasons for restraint absent bankruptcy proceed­ings. Several practical considerations are advisable for secured creditors when their debtors are delinquent under the terms of a security