§ 26-1-9.1-620 — Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral

Indiana § 26-1-9.1-620

• Jurisdiction: Indiana
• Title 26: COMMERCIAL LAW
• Art. 1: UNIFORM COMMERCIAL CODE
• Ch. 9.1: Secured Transactions

Text

(a) Except as otherwise provided in
subsection (g), a secured party may accept collateral in full or partial
satisfaction of the obligation it secures only if:
(1) the debtor consents to the acceptance under subsection (c);
(2) the secured party does not receive, within the time set forth in
subsection (d), a notification of objection to the proposal signed
by:
(A) a person to which the secured party was required to send a
proposal under IC 26-1-9.1-621; or
(B) 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;
(3) if the collateral is consumer goods, the collateral is not in the
possession of the debtor when the debtor consents to the
acceptance; and
(4) subsection (e) does not require the secured party to dispose of
the collateral or the debtor waives the requirement pursuant to IC 26-1-9.1-624.
(b) A purported or apparent acceptance of collateral under this
section is ineffective unless:
(1) the secured party consents to the acceptance in a signed record
or sends a proposal to the debtor; and
(2) the conditions of subsection (a) are met.
(c) For purposes of this section:
(1) 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
(2) a debtor consents to an acceptance of collateral in full
satisfaction of the obligation it secures only if the debtor agrees
to the terms of the acceptance in a record signed after default or
the secured party:
(A) sends to the debtor after default a proposal that is
unconditional or subject only to a condition that collateral not
in the possession of the secured party be preserved or
maintained;
(B) in the proposal, proposes to accept collateral in full
satisfaction of the obligation it secures; and
(C) does not receive a notification of objection signed by the
debtor within twenty (20) days after the proposal is sent.
(d) To be effective under subsection (a)(2), a notification of
objection must be received by the secured party:
(1) in the case of a person to which the proposal was sent
pursuant to IC 26-1-9.1-621, within twenty (20) days after
notification was sent to that person; and
(2) in other cases:
(A) within twenty (20) days after the last notification was sent
pursuant to IC 26-1-9.1-621; or
(B) if a notification was not sent, before the debtor consents to
the acceptance under subsection (c).
(e) A secured party that has taken possession of collateral shall
dispose of the collateral pursuant to IC 26-1-9.1-610 within the time
specified in subsection (f) if:
(1) sixty percent (60%) of the cash price has been paid in the case
of a purchase-money security interest in consumer goods; or
(2) sixty percent (60%) of the principal amount of the obligation
secured has been paid in the case of a non-purchase-money
security interest in consumer goods.
(f) To comply with subsection (e), the secured party shall dispose of
the collateral:
(1) within ninety (90) days after taking possession; or
(2) 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.
(g) In a consumer transaction, a secured party may not accept
collateral in partial satisfaction of the obligation it secures.

Legislative History

As added by P.L.57-2000, SEC.45. Amended by P.L.199-2023, SEC.85.