57A-9-205. Effect of debtor's right to use or dispose of collateral--Requirement of possession.
111 words·~1 min read·
/sd/title-57/chapter-57-9/57a-9-205·A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
(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.