11-9-620. Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.

Conditions to acceptance in satisfaction. Except as otherwise provided in subsection (g) of this Code section, a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:#

1. (1)

   The debtor consents to the acceptance under subsection (c) of this Code section;#

2. (2)

   The secured party does not receive, within the time set forth in subsection (d) of this Code section, a notification of objection to the proposal signed by:#

   1. (A)

      A person to which the secured party was required to send a proposal under Code Section 11-9-621; or#

   2. (B)

      Any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is the subject of the proposal;#

3. (3)

   If the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and#

4. (4)

   Subsection (e) of this Code section does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to Code Section 11-9-624.#

Purported acceptance ineffective. A purported or apparent acceptance of collateral under this Code section is ineffective unless:#

1. (1)

   The secured party consents to the acceptance in a signed record or sends a proposal to the debtor; and#

2. (2)

   The conditions of subsection (a) of this Code section are met.#

Debtor’s consent. For purposes of this Code section:#

1. (1)

   A debtor consents to an acceptance of collateral in partial satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record signed after default; and#

2. (2)

   A debtor consents to an acceptance of collateral in full satisfaction of the obligation it secures only if the debtor agrees to the terms of the acceptance in a record signed after default or the secured party:#

   1. (A)

      Sends to the debtor after default a proposal that is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained;#

   2. (B)

      In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and#

   3. (C)

      Does not receive a notification of objection signed by the debtor within 20 days after the proposal is sent.#

Effectiveness of notification. To be effective under paragraph (2) of subsection (a) of this Code section, a notification of objection must be received by the secured party:#

1. (1)

   In the case of a person to which the proposal was sent pursuant to Code Section 11-9-621, within 20 days after notification was sent to that person; and#

2. (2)

   In other cases:#

   1. (A)

      Within 20 days after the last notification was sent pursuant to Code Section 11-9-621; or#

   2. (B)

      If a notification was not sent, before the debtor consents to the acceptance under subsection (c) of this Code section.#

Mandatory disposition of consumer goods. A secured party that has taken possession of collateral shall dispose of the collateral pursuant to Code Section 11-9-610 within the time specified in subsection (f) of this Code section if:#

1. (1)

   Sixty percent of the cash price has been paid in the case of a purchase money security interest in consumer goods; or#

2. (2)

   Sixty percent of the principal amount of the obligation secured has been paid in the case of a nonpurchase money security interest in consumer goods.#

Compliance with mandatory disposition requirement. To comply with subsection (e) of this Code section, the secured party shall dispose of the collateral:#

1. (1)

   Within 90 days after taking possession; or#

2. (2)

   Within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and signed after default.#

No partial satisfaction in consumer transaction. In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.#