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

4-9-620. Acceptance of collateral in full or partial satisfaction of obligation - compulsory disposition of collateral. (a) Except as otherwise provided in subsection (g) of this section, 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) of this section; (2) The secured party does not receive, within the time set forth in subsection (d) of this section, a notification of objection to the proposal signed by: (A) A person to which the secured party was required to send a proposal under section 4-9-621; 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) of this section does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to section 4-9-624. (b) Reserved. (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 signed 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 signed 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 signed by the debtor within twenty days after the proposal is sent. (d) To be effective under paragraph (2) of subsection (a) of this section, 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 section 4-9-621, within twenty days after notification was sent to that person; and (2) In other cases: (A) Within twenty days after the last notification was sent pursuant to section 4-9-621; or (B) If a notification was not sent, before the debtor consents to the acceptance under subsection (c) of this section. (e) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to section 4-9-610 within the time specified in subsection (f) of this section if: (1) Sixty percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or (2) Sixty percent of the principal amount of the obligation secured has been paid in the case of a non-purchase-money security interest in consumer goods. (f) To comply with subsection (e) of this section, the secured party shall dispose of the collateral: (1) Within ninety 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 signed after default. (g) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures. Source: L. 2001: Entire article R&RE, p. 1414, � 1, effective July 1. L. 2023: IP(a)(2), (c)(1), IP(c)(2), (c)(2)(C), and (f)(2) amended, (SB 23-090), ch. 136, p. 567, � 85, effective August 7. Editor's note: This section is similar to former � 4-9-505 as it existed prior to 2001.