Section 55-9-620 - Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.

55-9-620. 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 authenticated by:   

(A)     a person to which the secured party was required to send a proposal under Section 55-9-621 NMSA 1978; 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)     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 55-9-624 NMSA 1978.   

(b)     A purported or apparent acceptance of collateral under this section is ineffective unless:   

(1)     the secured party consents to the acceptance in an authenticated 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 authenticated 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 authenticated 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 authenticated by the debtor within twenty 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 55-9-621 NMSA 1978, within twenty days after notification was sent to that person; and   

(2)     in other cases:   

(A)     within twenty days after the last notification was sent pursuant to Section 55-9-621 NMSA 1978; 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 55-9-610 NMSA 1978 within the time specified in Subsection (f) of this section if:   

(1)     sixty percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or   

(2)     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.   

(f)     To comply with Subsection (e) of this section, the secured party shall dispose of the collateral:   

(1)     within ninety 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 authenticated after default.   

(g)     In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.