§ 25-9-622. Effect of acceptance of collateral.

121 words·~1 min read·/nc/chapter-25/25-9-622

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

(a)Effect of acceptance. - 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)Discharge of subordinate interest notwithstanding noncompliance. - A subordinate interest is discharged or terminated under subsection

(a)of this section, even if the secured party fails to comply with this Article. (2000-169, s. 1.)