2006 New York Code - Acceptance Of Collateral In Full Or Partial Satisfaction Of Obligation; Compulsory Disposition Of Collateral

 
  Section 9--620. Acceptance of Collateral in Full or Partial Satisfaction
                   of Obligation; Compulsory Disposition of Collateral.
    (a) Conditions  to  acceptance  in  satisfaction.  Except as otherwise
  provided in subsection (g), a secured party  may  accept  collateral  in
  full or partial satisfaction of the obligation it secures only if:
         (1) the debtor consents to the acceptance under subsection (c);
         (2) the secured party does not receive, within the time set forth
             in  subsection  (d),  a  notification  of  objection  to  the
             proposal authenticated by:
             (A) a person to which the secured party was required to  send
                 a proposal under Section 9--621; or
             (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) 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) subsection (e) does not require the secured party to  dispose
             of  the  collateral  or  the  debtor  waives  the requirement
             pursuant to Section 9--624.
    (b) Purported  acceptance  ineffective.  A   purported   or   apparent
  acceptance of collateral under this section is ineffective unless:
         (1) the   secured   party   consents  to  the  acceptance  in  an
             authenticated record or sends a proposal to the debtor; and
         (2) the conditions of subsection (a) are met.
    (c) Debtor's consent. For purposes of this section:
         (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
             authenticated after default; and
         (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
             authenticated after default or the secured party:
             (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;
             (B) in  the  proposal,  proposes to accept collateral in full
                 satisfaction of the obligation it secures; and
             (C) does   not   receive   a   notification   of    objection
                 authenticated  by the debtor within twenty days after the
                 proposal is sent.
    (d) Effectiveness of notification. To be  effective  under  subsection
  (a)(2),  a  notification  of  objection  must be received by the secured
  party:
         (1) in the case of a  person  to  which  the  proposal  was  sent
             pursuant to Section 9--621, within 20 days after notification
             was sent to that person; and
         (2) in other cases:
             (A) within  20  days  after  the  last  notification was sent
                 pursuant to Section 9--621; or
             (B) if  a  notification  was  not  sent,  before  the  debtor
                 consents to the acceptance under subsection (c).
    (e) Mandatory  disposition of consumer goods. A secured party that has
  taken possession of collateral shall dispose of the collateral  pursuant
  to Section 9--610 within the time specified in subsection (f) if:
         (1) sixty  percent of the cash price has been paid in the case of
             a purchase-money security interest in consumer goods; or
         (2) sixty  percent  of  the  principal  amount  of the obligation
             secured has been paid in the  case  of  a  non-purchase-money
             security interest in consumer goods.
    (f) Compliance  with mandatory disposition requirement. To comply with
  subsection (e), the secured party shall dispose of the collateral:
         (1) within 90 days after taking possession; or
         (2) 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.
    (g) 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.