Title 6A
Uniform Commercial Code

Chapter 9
Secured Transactions

Part 6
Default

Subpart 1
Default and Enforcement of Security Interest

§ 6A-9-615.1. Security interests — Cross collateral.

(a) In a credit transaction for the sale of consumer goods or services the creditor may, subject to the provisions on termination of security interests in subsections (b) and (c) of this section, take a security interest in property of the buyer in addition to the goods sold or upon which services are performed only if the creditor has an existing security interest in that property as a result of a prior sale. If two (2) or more credit transactions are consolidated into a single transaction or charged pursuant to a revolving or open end credit plan, the creditor may take a security interest in property sold in the subsequent transaction to secure the previous debt or debts outstanding.

(b) If debts arising from two (2) or more credit transactions for the sale of consumer goods or services:

(1) Are secured by cross collateral,

(2) Are consolidated into one debt payable on a single schedule of payments, or

(3) Are charged pursuant to a revolving or open end credit plan, and the debts are secured by security interests taken with respect to one or more of the transactions, payments received by the creditor after the taking of the cross collateral or the consolidation are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been applied to the payment of the transaction first made. To the extent debts are paid according to this subsection, security interests in items of property terminate as the debts originally incurred with respect to each item is paid.

(c) If the debts consolidated arose from two (2) or more transactions made on the same day, or if two (2) or more items are purchased as part of a single transaction, payments received by the creditor are deemed, for the purpose of determining the amount of the debt secured by the various security interests, to have been applied first to the payment of the smallest debt or the least expensive item.

(d) A security interest taken in violation of this section is unenforceable and any creditor who attempts to take such a security interest may not retain or recover any finance, delinquency, collection, repossession, refinancing, or consolidation charges based upon the contract.