62A.9A-622 - Effect of acceptance of collateral.

Effect of acceptance of collateral.

(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 c 250 § 9A-622.]