§ 59. Consenting creditor must relinquish security.
157 words·~1 min read·
/ny/debtor-creditor/insolvent-s-discharge-from-debts/59·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
§ 59. Consenting creditor must relinquish security. A creditor who
has, in his own name, or in trust for him, a mortgage, judgment, or
other security, for the payment of a sum of money, which is a lien upon,
or otherwise affects, real or personal property belonging to the
petitioner, or transferred by him since the lien was created, cannot
become a consenting creditor, with respect to the debt so secured,
unless he adds to or includes in his consent, a written declaration,
under his hand, to the effect, that he relinquishes the mortgage,
judgment, or other security, so far as it affects that property, to the
trustee to be appointed pursuant to the petition, for the benefit of all
the creditors. Such a declaration operates, to that extent, as an
assignment to the trustee, of the mortgage, judgment, or other security;
and vests in him accordingly all the right and interest of the
consenting creditor therein.