§ 9-205. Use or disposition of collateral permissible.

125 words·~1 min read·/de/title-6/chapter-9/9-205

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)When security interest not invalid or fraudulent. — A security interest is not invalid or fraudulent against creditors solely because:

(1)the debtor has the right or ability to:

(A)use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;

(B)collect, compromise, enforce, or otherwise deal with collateral;

(C)accept the return of collateral or make repossessions; or

(D)use, commingle, or dispose of proceeds; or

(2)the secured party fails to require the debtor to account for proceeds or replace collateral.

(b)Requirements of possession not relaxed. — 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.