TITLE 28

COMMERCIAL TRANSACTIONS

CHAPTER 9

SECURED TRANSACTIONS

PART 6.

DEFAULT

28-9-622.  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 chapter.

History:

[28-9-622, added 2001, ch. 208, sec. 2, p. 793.]