2016 Kentucky Revised Statutes CHAPTER 355 - UNIFORM COMMERCIAL CODE Article 9 - Secured Transactions -- Sales of Accounts, Contract Rights, and Chattel Paper 355.9-620 Acceptance of collateral in full or partial satisfaction of obligation -- Compulsory disposition of collateral.
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355.9-620 Acceptance of collateral in full or partial satisfaction of obligation -Compulsory disposition of collateral.
(1)
(2)
(3)
(4)
Except as otherwise provided in subsection (7) of this section, 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) of this section;
(b) The secured party does not receive, within the time set forth in subsection (4)
of this section, a notification of objection to the proposal authenticated by:
1.
A person to which the secured party was required to send a proposal
under KRS 355.9-621; or
2.
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) of this section does not require the secured party to dispose of
the collateral or the debtor waives the requirement pursuant to KRS 355.9624.
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) of this section are met.
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:
1.
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.
In the proposal, proposes to accept collateral in full satisfaction of the
obligation it secures; and
3.
Does not receive a notification of objection authenticated by the debtor
within twenty (20) days after the proposal is sent.
To be effective under subsection (1)(b) of this section, 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 KRS 355.9621, within twenty (20) days after notification was sent to that person; and
(b) In other cases:
1.
(5)
(6)
(7)
Within twenty (20) days after the last notification was sent pursuant to
KRS 355.9-621; or
2.
If a notification was not sent, before the debtor consents to the
acceptance under subsection (3) of this section.
A secured party that has taken possession of collateral shall dispose of the collateral
pursuant to KRS 355.9-610 within the time specified in subsection (6) of this
section if:
(a) Sixty percent (60%) of the cash price has been paid in the case of a purchasemoney security interest in consumer goods; or
(b) Sixty percent (60%) of the principal amount of the obligation secured has
been paid in the case of a non-purchase-money security interest in consumer
goods.
To comply with subsection (5) of this section, the secured party shall dispose of the
collateral:
(a) Within ninety (90) days after taking possession; or
(b) Within any longer period to which the debtor and all secondary obligors have
agreed in an agreement to that effect entered into and authenticated after
default.
In a consumer transaction, a secured party may not accept collateral in partial
satisfaction of the obligation it secures.
Effective: July 1, 2001
History: Created 2000 Ky. Acts ch. 408, sec. 138, effective July 1, 2001.
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