§ 36-9-205. Use or disposition of collateral permissible.
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/sc/title-36-commercial-code/chapter-9/commercial-code-secured-transactions/36-9-205·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
§ 36-9-205. Use or disposition of collateral permissible.
(a)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)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.