(a) If a claim is secured, in whole or in part, the security shall be described in the proof of claim.
(b) Written instruments evidencing the security shall be subject to the provisions of § 28-50-103 relative to written instruments upon which a claim is founded. However, if the instrument is recorded in any public record, a duly authenticated copy may be exhibited in lieu of the original.
(c) Subject to the requirements of subsections (a) and (b) of this section, a secured claim may be presented, filed, and allowed in the same manner and subject to the same conditions as an unsecured claim.
(d) An order allowing a secured claim shall identify it as such and shall describe the security, either in detail or by reference to a recorded instrument in which a detailed description may be found.
(e) Payment of a secured claim, after allowance, shall be made only as follows:
(1) If the creditor surrenders all of his or her security to the personal representative, then upon the basis of the full amount thereof, as an unsecured claim;
(2) If the creditor, proceeding with due diligence and in a manner provided by law, liquidates and applies to the payment of his or her claim the proceeds of all or a part of his or her security and surrenders to the personal representative any part not so liquidated and applied, then upon the basis of the balance of the claim remaining unpaid, as an unsecured claim;
(3) If the secured creditor fails to surrender his or her security as provided in subdivision (e)(1) of this section, or to initiate proceedings as provided in subdivision (e)(2) of this section, within sixty (60) days after the expiration of the period for filing claims against the estate, or within such additional time as the court by order may prescribe, or before the filing of a final settlement by the personal representative if it is filed after the expiration of the sixty-day period, he or she shall be deemed to have elected to waive his or her claim against the estate and shall have recourse only against his or her security for the payment of the debt secured thereby;
(4) If the obligation constituting the basis of a secured claim which has been allowed is not due, then the court, after a hearing on a petition filed by an interested person if it is found for the best interest of the estate and not injurious to the creditors, may order an acceleration of maturity of the obligation, but only by consent of the creditor if the obligation was incurred prior to July 1, 1949, and shall determine the present value of the claim as provided in § 28-50-108; and
(5) After allowance of a secured claim based upon an obligation which is due under the provisions of the contract or which has become due by order of the court as authorized in subdivision (e)(4) of this section, if the creditor has not proceeded as authorized in subdivision (e)(1) or (e)(2) of this section, upon petition of an interested person and after due hearing if found for the best interest of the estate or required for the protection of unsecured creditors the court may:
(A) Order the property constituting the security to be sold free of the lien of the secured creditor, subject to the provisions of § 28-51-107;
(B) Order the sale of the decedent's title to or equity of redemption in the property subject to the lien or title held by the secured creditor; or
(C) Order the personal representative to abandon the property as of no value to the estate, without prejudice to dower or homestead rights or to the rights of the distributees. If the property is ordered sold free of the lien, the proceeds shall be applied first to the payment of costs incident to the sale, and next to the payment of the secured claim, and the balance, if any, shall be paid to the personal representative.
(f) This section shall not apply to contingent claims except as to security given by the decedent to the creditor holding the contingent claim.
Section: Previous 28-50-102 28-50-103 28-50-104 28-50-105 28-50-106 28-50-107 28-50-108 28-50-109 28-50-110 28-50-111 28-50-112 28-50-113 28-50-114 NextLast modified: November 15, 2016