Use or disposition of collateral permissible.

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  • (1) A security interest is not invalid or fraudulent against creditors solely because:
    • (a) the debtor has the right or ability to:
      • (i) use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;
      • (ii) collect, compromise, enforce, or otherwise deal with collateral;
      • (iii) accept the return of collateral or make repossessions; or
      • (iv) use, commingle, or dispose of proceeds; or
    • (b) the secured party fails to require the debtor to account for proceeds or replace collateral.
  • (2) This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.




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