57A-9-622. 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), even if the secured party fails to comply with this chapter.
Source: SL 2000, ch 231.