LexisNexis (October 20, 2016, 9:29 AM EDT) -- When a borrower defaults, the secured lender has a right to foreclose on the collateral by public or private sale. With respect to receivables owing to the debtor—accounts receivable, executory contract rights, general intangibles, chattel paper, or negotiable instruments—the secured lender can avoid the pitfalls of a foreclosure sale and collect directly from the account debtors. That's the beauty of being able to step into the shoes of the borrower. For example, if the debtor is a retail dealer, proceeds from the inventory might include accounts receivable (from customers who buy on 30-day open account), chattel paper (from customers who buy on secured installment credit) and promissory notes (from customers who buy on long- term unsecured credit). With respect to direct collection against the third-party obligors, the rights and duties of the secured party are set forth in UCC 9-607. A recent bankruptcy court decision from Louisiana nicely illustrates the power of direct collection in the context of a Chapter 11 bankruptcy. ...