EFFECT OF ACCEPTANCE OF COLLATERAL
(a) 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) A subordinate interest is discharged or terminated under subsection (a) of this section, even if the secured party fails to comply with this article.
Added by Laws 2000, c. 371, § 129, eff. July 1, 2001.
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