Alabama § 7-9A-205 Use or Disposition of Collateral Permissible

Alabama Statutes

§ 7-9A-205 — Use or Disposition of Collateral Permissible

Alabama·Title 7 Commercial Code·Art. 9A Secured Transactions·Div. 1 Effectiveness and Attachment·Part 2 Effectiveness of Security Agreement, Attachment of Security Interest; Rights of Parties to Security Agreement

(a)When security interest not invalid or fraudulent. A security interest is not invalid or fraudulent against creditors solely because:

(1)the debtor has the right or ability to:

(A)use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;

(B)collect, compromise, enforce, or otherwise deal with collateral;

(C)accept the return of collateral or make repossessions; or

(D)use, commingle, or dispose of proceeds; or

(2)the secured party fails to require the debtor to account for proceeds or replace collateral.

(b)Requirements of possession not relaxed. This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.

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(a) When security interest not invalid or fraudulent. A security interest is not invalid or fraudulent against creditors solely because:
(1) the debtor has the right or ability to:
(A) use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;
(B) collect, compromise, enforce, or otherwise deal with collateral;
(C) accept the return of collateral or make repossessions; or
(D) use, commingle, or dispose of proceeds; or
(2) the secured party fails to require the debtor to account for proceeds or replace collateral.
(b) Requirements of possession not relaxed. This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.

Alabama § 7-9A-205 (Use or Disposition of Collateral Permissible) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.