Effect of acceptance of collateral

4-9-622. 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) of this section, even if the secured party fails to comply with this article. Source: L. 2001: Entire article R&RE, p. 1416, � 1, effective July 1.