§ 12A-1-9-622. Effect of acceptance of collateral.  


Latest version.
  • EFFECT OF ACCEPTANCE OF COLLATERAL

    (a)  A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:

    (1)  discharges the obligation to the extent consented to by the debtor;

    (2)  transfers to the secured party all of a debtor’s rights in the collateral;

    (3)  discharges the security interest or agricultural lien that is the subject of the debtor’s consent and any subordinate security interest or other subordinate lien; and

    (4)  terminates any other subordinate interest.

    (b)  A subordinate interest is discharged or terminated under subsection (a) of this section, even if the secured party fails to comply with this article.

Added by Laws 2000, c. 371, § 129, eff. July 1, 2001.