Texas Business & Commerce Code—Notice of Election to Dispose of or Retain Secured Collateral After Repossession is a Prerequisite to an Article 9 Deficiency Judgment

Summarizes the Texas Supreme Court’s case Tanenbaum v. Economic Laboratory Inc. In Tanenbaum, the Court held that the Texas Business and Commerce Code requires that after repossession a secured creditor must elect to either sell the collateral or retain it in complete satisfaction of the debt. Recognizing the possibility of abuse by creditors, the court adopted a rule that prevents abuse and protects unwary debtors.