Can a secured creditor obtain a deficiency judgment against a debtor who has defaulted on a loan?

California, United States of America


The following excerpt is from Brunzell Construction Co., Inc. v. Smith, 200 Cal.App.3d 617, 246 Cal.Rptr. 182 (Cal. App. 1988):

After default, section 9504, subdivision (3), empowers the secured creditor to sell the collateral in a "commercially reasonable manner" after written notice to the debtor and other secured parties of the time and place of sale. This notice of sale allows the debtor to discharge the debt and redeem the collateral, produce another purchaser, or ensure that the sale is commercially reasonable. (Rutan v. Summit Sports, Inc. (1985) 173 Cal.App.3d 965, 971-972, 219 Cal.Rptr. 381.) The secured creditor must prove compliance with section 9504 to obtain a deficiency judgment against the debtor. ( Id., p. 972, 219 Cal.Rptr. 381.)

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