§ 554.9620 — Acceptance of collateral in full or partial satisfaction of obligation — compulsory disposition of collateral

Iowa § 554.9620

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 554: UNIFORM COMMERCIAL CODE

Text

compulsory disposition of collateral.
1. Conditions to acceptance in satisfaction. Except as otherwise provided in subsection
7,asecuredpartymayacceptcollateralinfullorpartialsatisfactionoftheobligationitsecures
only if:
a. the debtor consents to the acceptance under subsection 3;
b. the secured party does not receive, within the time set forth in subsection 4, a
notification of objection to the proposal signed by:
(1) a person to which the secured party was required to send a proposal under section
554.9621; or
(2) any other person, other than the debtor, holding an interest in the collateral
subordinate to the security interest that is the subject of the proposal;
c. if the collateral is consumer goods, the collateral is not in the possession of the debtor
when the debtor consents to the acceptance; and

d. subsection5doesnotrequirethesecuredpartytodisposeofthecollateralorthedebtor
waives the requirement pursuant to section 554.9624.
2. Purported acceptance ineffective. A purported or apparent acceptance of collateral
under this section is ineffective unless:
a. the secured party consents to the acceptance in a signed record or sends a proposal to
the debtor; and
b. the conditions of subsection 1 are met.
3. Debtor’s consent. For purposes of this section:
a. a debtor consents to an acceptance of collateral in partial satisfaction of the obligation
it secures only if the debtor agrees to the terms of the acceptance in a record signed after
default; and
b. a debtor consents to an acceptance of collateral in full satisfaction of the obligation it
securesonlyifthedebtoragreestothetermsoftheacceptanceinarecordsignedafterdefault
or the secured party:
(1) sends to the debtor after default a proposal that is unconditional or subject only to a
conditionthatcollateralnotinthepossessionofthesecuredpartybepreservedormaintained;
(2) in the proposal, proposes to accept collateral in full satisfaction of the obligation it
secures; and
(3) does not receive a notification of objection signed by the debtor within twenty days
after the proposal is sent.
4. Effectiveness of notification. To be effective under subsection 1, paragraph “b”, a
notification of objection must be received by the secured party:
a. in the case of a person to which the proposal was sent pursuant to section 554.9621,
within twenty days after notification was sent to that person; and
b. in other cases:
(1) within twenty days after the last notification was sent pursuant to section 554.9621; or
(2) if a notification was not sent, before the debtor consents to the acceptance under
subsection 3.
5. Mandatory disposition of consumer goods. A secured party that has taken possession
of collateral shall dispose of the collateral pursuant to section 554.9610 within the time
specified in subsection 6 if:
a. sixty percent of the cash price has been paid in the case of a purchase-money security
interest in consumer goods; or
b. sixty percent of the principal amount of the obligation secured has been paid in the
case of a non-purchase-money security interest in consumer goods.
6. Compliance with mandatory disposition requirement. To comply with subsection 5,
the secured party shall dispose of the collateral:
a. within ninety days after taking possession; or
b. within any longer period to which the debtor and all secondary obligors have agreed in
an agreement to that effect entered into and signed after default.
7. No partial satisfaction in consumer transaction. In a consumer transaction, a secured
party may not accept collateral in partial satisfaction of the obligation it secures.