§ 336.9-622 — Effect of Acceptance of Collateral
Plain-Language Summary
When the secured party accepts collateral in satisfaction of the debt, the obligation is discharged, all subordinate interests are discharged, and the secured party takes all the debtor's rights.
336.9-622 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), even if the secured party fails to comply with this article.
History:
History: History:
2000 c 399 art 1 s 123