30-9-620. (Effective July 1, 2001) Acceptance of collateral in full or partial satisfaction -- compulsory disposition of collateral. (1) Except as otherwise provided in subsection (7), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:
     (a) the debtor consents to the acceptance under subsection (3);
     (b) the secured party does not receive, within the time set forth in subsection (4), a notification of objection to the proposal authenticated by:
     (i) a person to which the secured party was required to send a proposal under 30-9-621; or
     (ii) 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;
     (c) if the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and
     (d) subsection (5) does not require the secured party to dispose of the collateral.
     (2) A purported or apparent acceptance of collateral under this section is ineffective unless:
     (a) the secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and
     (b) the conditions of subsection (1) are met.
     (3) For purposes of this section:
     (a) 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 authenticated after default; and
     (b) 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 authenticated after default or the secured party:
     (i) 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;
     (ii) in the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and
     (iii) does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.
     (4) To be effective under subsection (1)(b), a notification of objection must be received by the secured party:
     (a) in the case of a person to which the proposal was sent pursuant to 30-9-621, within 20 days after notification was sent to that person; and
     (b) in other cases:
     (i) within 20 days after the last notification was sent pursuant to 30-9-621; or
     (ii) if a notification was not sent, before the debtor consents to the acceptance under subsection (3).
     (5) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to 30-9-610 within the time specified in subsection (6) if:
     (a) 60% of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or
     (b) 60% of the principal amount of the obligation secured has been paid in the case of a nonpurchase-money security interest in consumer goods.
     (6) To comply with subsection (5), the secured party shall dispose of the collateral:
     (a) within 90 days after taking possession; or
     (b) within any longer period to which the debtor and all secondary obligors have agreed by authenticating a record including a statement to that effect after default.
     (7) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.

     History: En. Sec. 117, Ch. 305, L. 1999.