Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral

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    (a)    Except as otherwise provided in subsection (g), 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);

        (2)    The secured party does not receive, within the time set forth in subsection (d), a notification of objection to the proposal authenticated by:

            (A)    A person to which the secured party was required to send a proposal under § 9-621; 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) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to § 9-624.

    (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) 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 20 days after the proposal is sent.

    (d)    To be effective under subsection (a)(2), 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 § 9-621, within 20 days after notification was sent to that person; and

        (2)    In other cases:

            (A)    Within 20 days after the last notification was sent pursuant to § 9-621; or

            (B)    If a notification was not sent, before the debtor consents to the acceptance under subsection (c).

    (e)    A secured party that has taken possession of collateral shall dispose of the collateral pursuant to § 9-610 within the time specified in subsection (f) if:

        (1)    60 percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or

        (2)    60 percent of the principal amount of the obligation secured has been paid in the case of a nonpurchase-money security interest in consumer goods.

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

        (1)    Within 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 authenticated after default.

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


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