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Official Code of Georgia Annotated

Title 11. COMMERCIAL CODE · Chapter 9. · Article 9. SECURED TRANSACTIONS · Part 2. EFFECTIVENESS OF SECURITY AGREEMENT; ATTACHMENT OF SECURITY INTEREST; RIGHTS OF PARTIES TO SECURITY AGREEMENT

11-9-205. Use or disposition of collateral permissible.

Active

Current through: Including Acts of the 2025 Regular Session of the General Assembly.

  1. (a)

    When security interest not invalid or fraudulent. A security interest is not invalid or fraudulent against creditors solely because:#

    1. (1)

      The debtor has the right or ability to:#

      1. (A)

        Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;#

      2. (B)

        Collect, compromise, enforce, or otherwise deal with collateral;#

      3. (C)

        Accept the return of collateral or make repossessions; or#

      4. (D)

        Use, commingle, or dispose of proceeds; or#

    2. (2)

      The secured party fails to require the debtor to account for proceeds or replace collateral.#

  2. (b)

    Requirements of possession not relaxed. This Code 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.#

The notes below are printed with the section but are not enacted law (O.C.G.A. § 1-1-1(c)). They are shown apart from the text.

History

Code 1981, § 11-9-205, enacted by Ga. L. 2001, p. 362, § 1.

Law reviews

For article discussing the classification of a continuing security interest in changing collateral as an unenforceable preference under Section 60a of the Bankruptcy Act, see 1 Ga. L. Rev. 257 (1967). For note examining the conflict between the floating lien in after-acquired property under the Uniform Commercial Code and the voidable preferences provisions of the Bankruptcy Act, see 9 Ga. L. Rev. 685 (1975). For article, “The Good Faith Purchase Idea and the Uniform Commercial Code,” see 15 Ga. L. Rev. 605 (1981).

Read the official page (the state's PDF, opened at the page this text was read from).

Current through: Including Acts of the 2025 Regular Session of the General Assembly.

Text read from t11-(v9)-2022-pdf.pdf, Volume V9, 2022 edition, page 765; merge action: carried; file SHA-256 ad397fccbf21.