§ 6A-9-620 - Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.
SECTION 6A-9-620
§ 6A-9-620 Acceptance of collateral infull or partial satisfaction of obligation; compulsory disposition ofcollateral. – (a) Conditions to acceptance in satisfaction. Except as otherwiseprovided in subsection (g), a secured party may accept collateral in full orpartial 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 setforth in subsection (d), a notification of objection to the proposalauthenticated by:
(i) A person to which the secured party was required to senda proposal under § 6A-9-621; or
(ii) Any other person, other than the debtor, holding aninterest in the collateral subordinate to the security interest that is thesubject of the proposal;
(3) If the collateral is consumer goods, the collateral isnot in the possession of the debtor when the debtor consents to the acceptance;and
(4) Subsection (e) does not require the secured party todispose of the collateral or the debtor waives the requirement pursuant to§ 6A-9-624.
(b) Purported acceptance ineffective. A purported orapparent acceptance of collateral under this section is ineffective unless:
(1) The secured party consents to the acceptance in anauthenticated record or sends a proposal to the debtor; and
(2) The conditions of subsection (a) are met.
(c) Debtor's consent. For purposes of this section:
(1) A debtor consents to an acceptance of collateral inpartial satisfaction of the obligation it secures only if the debtor agrees tothe terms of the acceptance in a record authenticated after default; and
(2) A debtor consents to an acceptance of collateral in fullsatisfaction of the obligation it secures only if the debtor agrees to theterms of the acceptance in a record authenticated after default or the securedparty:
(i) Sends to the debtor after default a proposal that isunconditional or subject only to a condition that collateral not in thepossession of the secured party be preserved or maintained;
(ii) In the proposal, proposes to accept collateral in fullsatisfaction of the obligation it secures; and
(iii) Does not receive a notification of objectionauthenticated by the debtor within 20 days after the proposal is sent.
(d) Effectiveness of notification. To be effectiveunder subsection (a)(2), a notification of objection must be received by thesecured party:
(1) In the case of a person to which the proposal was sentpursuant to § 6A-9-621, within 20 days after notification was sent to thatperson; and
(2) In other cases:
(i) Within 20 days after the last notification was sentpursuant to § 6A-9-621; or
(ii) If a notification was not sent, before the debtorconsents to the acceptance under subsection (c).
(e) Mandatory disposition of consumer goods. A securedparty that has taken possession of collateral shall dispose of the collateralpursuant to § 6A-9-610 within the time specified in subsection (f) if:
(1) 60 percent of the cash price has been paid in the case ofa purchase-money security interest in consumer goods; or
(2) 60 percent of the principal amount of the obligationsecured has been paid in the case of a non-purchase-money security interest inconsumer goods.
(f) Compliance with mandatory disposition requirement.To comply with subsection (e), the secured party shall dispose of thecollateral:
(1) Within 90 days after taking possession; or
(2) Within any longer period to which the debtor and allsecondary obligors have agreed in an agreement to that effect entered into andauthenticated after default.
(g) No partial satisfaction in consumer transaction.In a consumer transaction, a secured party may not accept collateral in partialsatisfaction of the obligation it secures.