UCC s9-609(b)(2) compliance issues after default - debtor notification timing
We had a borrower default on equipment financing last month and I'm trying to make sure we're following UCC s9-609(b)(2) properly for the repossession and disposition process. The security agreement covers industrial printing equipment worth about $180k. My question is about the notification requirements - do we need to send the debtor written notice before we can dispose of the collateral, or is it after we take possession but before the sale? I've read conflicting interpretations and our legal counsel is backlogged. The debtor has been cooperative so far but I want to make sure we don't mess up the notification timing and create liability issues. Has anyone dealt with s9-609(b)(2) compliance recently? What's the standard practice for timing these notices?
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Sydney Torres
The notification under UCC s9-609(b)(2) comes AFTER you take possession but BEFORE the disposition sale. You don't need advance notice to repossess if your security agreement allows it, but you absolutely must notify the debtor before selling the collateral. Standard practice is 10 days minimum notice, though some states require more.
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Kaitlyn Jenkins
•This is correct. The s9-609(b)(2) notice is separate from repossession rights. I always recommend at least 10 business days between notice and sale to avoid any challenges.
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Caleb Bell
•Wait, I thought you had to give notice before taking the equipment? That's what happened with our truck repo last year.
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Danielle Campbell
For equipment that valuable, you definitely want to be extra careful about UCC s9-609(b)(2) compliance. The notice has to include specific information about the planned disposition - sale date, method of sale, debtor's right to redeem. Don't just send a generic notice or you could face damages if the debtor challenges it later.
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Alfredo Lugo
•Thanks, that's helpful. Do you have a template or standard language you use for the s9-609(b)(2) notices?
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Danielle Campbell
•I don't share templates but your attorney should have standard forms. The key is making sure all the statutory requirements are covered.
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Rhett Bowman
•Actually, I ran into document consistency issues like this last month. Ended up using Certana.ai's document verification tool to upload our security agreement and disposition notices to make sure everything aligned properly. Caught a debtor name mismatch that could have been a problem.
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Abigail Patel
UCC s9-609(b)(2) is pretty straightforward but the devil is in the details. You mentioned the debtor has been cooperative - that actually makes compliance easier because you're less likely to face challenges. Just make sure your notice is sent to the correct address and includes all required elements. Document everything.
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Daniel White
•How do you handle it if the debtor moved and you don't have a current address? Does that affect s9-609(b)(2) compliance?
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Abigail Patel
•You have to make reasonable efforts to locate them. Send to last known address and consider skip tracing if the amount justifies it.
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Nolan Carter
Been through this process dozens of times. For s9-609(b)(2) compliance, timing is critical but so is content. Your notice needs to be clear about the debtor's redemption rights and provide enough detail about the planned sale. Industrial equipment like printing gear often requires specialized auction houses, so mention that in your notice if applicable.
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Alfredo Lugo
•Good point about specialized auctions. We're planning to use an equipment auction company that handles printing equipment regularly.
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Natalia Stone
•Make sure the auction company understands UCC requirements too. Some don't properly handle the notice provisions.
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Nolan Carter
•Exactly. And get their procedures in writing so you can show compliance if questioned later.
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Tasia Synder
This whole UCC s9-609(b)(2) thing is so confusing! Why do they make it so complicated? Can't you just take the equipment and sell it if they don't pay???
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Sydney Torres
•The notice requirements protect debtors from unfair sales. Without proper notice, they can't exercise redemption rights or object to inadequate sale prices.
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Tasia Synder
•I guess that makes sense but it's still a pain when you just want to recover your money.
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Selena Bautista
We had a s9-609(b)(2) compliance issue blow up on us two years ago because we rushed the notification. Debtor sued claiming inadequate notice and we ended up settling for more than the equipment was worth. Don't cut corners on this - the statutory requirements exist for a reason.
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Alfredo Lugo
•Yikes, that's exactly what I'm trying to avoid. What specific part of the notice did they challenge?
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Selena Bautista
•We didn't properly describe the sale method and they claimed our timeline was too short. Judge agreed the notice was deficient.
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Mohamed Anderson
•This is why I always recommend having someone review all your repo docs before proceeding. Too easy to miss something important in UCC s9-609(b)(2).
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Ellie Perry
One thing people forget about UCC s9-609(b)(2) - you might need to notify guarantors too, not just the primary debtor. Check your documentation to see who else has rights in the collateral or obligations under the loan.
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Alfredo Lugo
•Good catch. We do have personal guarantors on this deal. Do they get the same notice as the debtor?
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Ellie Perry
•If they're secondary obligors under the UCC, yes. Better to over-notify than under-notify in this situation.
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Landon Morgan
For what it's worth, I've found that being extra thorough with UCC s9-609(b)(2) notices actually helps with collections sometimes. Debtors see you're following proper procedures and are more likely to work out payment arrangements rather than fight the repo.
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Teresa Boyd
•That's interesting. I never thought about using compliance as a negotiation tool.
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Landon Morgan
•It shows you're professional and serious about following the law. Some debtors respect that.
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Lourdes Fox
Just want to echo what others said about documentation. Keep copies of everything related to your s9-609(b)(2) compliance - certified mail receipts, the actual notices, any responses from the debtor. If this goes sideways later, you'll need to prove you followed proper procedures.
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Bruno Simmons
•How long do you keep those records? Is there a statute of limitations on challenges to UCC compliance?
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Lourdes Fox
•I keep repo files for at least 7 years. Different states have different limitation periods for UCC claims.
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Aileen Rodriguez
•Speaking of documentation, I've started using Certana.ai to verify all my UCC documents match up properly before sending notices. Upload your original UCC-1, security agreement, and draft notice - it catches inconsistencies that could cause problems later. Saved me from a potential s9-609(b)(2) compliance issue last month when it flagged a debtor name variation.
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Zane Gray
OP, sounds like you're on the right track asking these questions upfront. Most UCC s9-609(b)(2) problems happen when people rush the process. Take your time, follow the statutory requirements, and document everything. The equipment isn't going anywhere while you get the paperwork right.
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Alfredo Lugo
•Thanks everyone for the advice. Feeling much more confident about handling this properly now. Going to double-check our security agreement language and prepare a comprehensive notice.
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Zane Gray
•Smart approach. Better to spend extra time on compliance than deal with litigation later.
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Camila Jordan
Just wanted to add my experience with UCC s9-609(b)(2) compliance - the timing really is critical. I've handled several equipment repos and always send the notice by certified mail with return receipt requested at least 10 days before any planned sale. Also make sure to include the debtor's right to an accounting of the unpaid indebtedness and charges. For $180k worth of equipment, I'd also recommend getting a professional appraisal before the sale to help justify the sale price if challenged later. The cooperative debtor attitude is good, but don't let that make you complacent on following proper procedures.
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Abby Marshall
•Great points about the certified mail and professional appraisal. As someone new to UCC compliance, I'm wondering - is there a standard timeline most lenders follow from default to disposition? Also, when you mention the debtor's right to an accounting, does that need to be a detailed breakdown of principal, interest, fees, and repo costs, or can it be more general?
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