New Jersey § 12A:9-205 Use or disposition of collateral permissible.

New Jersey Statutes

§ 12A:9-205 — Use or disposition of collateral permissible.

New Jersey § 12A:9-205

Title 12ACOMMERCIAL TRANSACTIONS

This text of New Jersey § 12A:9-205 (Use or disposition of collateral permissible.) is published on Counsel Stack Legal Research, covering New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

N.J. Stat. Ann. § 12A:9-205 (2026).

Text

12A:9-205. Use or Disposition of Collateral Permissible.

(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

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12A:9-205. Use or Disposition of Collateral Permissible. (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. L.2001, c.117, s.1; amended 2001, c.386, s.11.