Proceeds from the disposition of collateral after default are distributed in a certain order with any surplus generally going to the debtor.

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This is true. Proceeds from the disposition of collateral are usually distributed in a specific order, with the first priority given to the payment of any outstanding debt owed to the secured creditor. If there is any surplus after all outstanding debts have been paid, it is typically returned to the debtor.

Proceeds from the Disposition of Collateral After Default Are Distributed