satisfaction of obligation; compulsory disposition of collateral. ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL SATISFACTION OF OBLIGATION; COMPULSORY DISPOSITION OF COLLATERAL (a) Except as otherwise provided in subsection (g) of this section, 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) of this section;
(2)the secured party does not receive, within the time set forth in subsection (d) of this section, a notification of objection to the proposal signed by:
(A)a person to which the secured party was required to send a proposal under Section 1-9-621 of this title; or (B) any other person, other than the debtor, holding an interest in the collateral subordinate to the
Free access — add to your briefcase to read the full text and ask questions with AI
satisfaction of obligation; compulsory disposition of collateral. ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL SATISFACTION OF OBLIGATION; COMPULSORY DISPOSITION OF COLLATERAL (a) Except as otherwise provided in subsection (g) of this section, 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) of this section; (2) the secured party does not receive, within the time set forth in subsection (d) of this section, a notification of objection to the proposal signed by: (A) a person to which the secured party was required to send a proposal under Section 1-9-621 of this title; 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) of this section does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to Section 1-9-624 of this title. (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) of this section 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 paragraph (2) of subsection (a) of this section, 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 Section 1-9-621 of this title, 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 Section 1-9-621 of this title; or (B) if a notification was not sent, before the debtor consents to the acceptance under subsection (c) of this section. (e) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to Section 1-9-610 of this title within the time specified in subsection (f) of this section 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) of this section, 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.