Cal. Code Regs. Tit. 10, § 5004 - Collection Requirements for Collection Guarantees
(a) A Lender shall not be authorized to file
a Demand for a Collection Guarantee unless it has complied with this section.
The requirements contained in this section are in addition to the requirements
contained in section 5003.
(b) The
Lender must liquidate all Collateral, but shall not be required to file a
lawsuit against any Borrower or guarantor. "Liquidate" as used in this
paragraph means that the Lender has exhausted all Collateral by one of the
following methods:
(1) converted the
Collateral into cash;
(2)
demonstrated, to the satisfaction of the Corporation that the Collateral is
without sufficient value to convert to cash; or
(3) demonstrated that the Borrower has filed
for bankruptcy.
Notes
Note: Authority cited: Section 14022(b), Corporations Code. Reference: Section 14064, Corporations Code.
2. Repealer and new section filed 6-24-91; operative 7-24-91 (Register 91, No. 42).
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