400.9-620. Acceptance of collateral in full or partial satisfaction of obligation--compulsory disposition of collateral. - Missouri Statutes

Acceptance of collateral in full or partial satisfaction ofobligation--compulsory disposition of collateral.

400.9-620. (a) Except as otherwise provided in subsection (g), asecured party may accept collateral in full or partial satisfaction of theobligation 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 insubsection (d), a notification of objection to the proposal authenticatedby:

(A) A person to which the secured party was required to send aproposal under section 400.9-621; or

(B) Any other person, other than the debtor, holding an interest inthe collateral subordinate to the security interest that is the subject ofthe proposal;

(3) If the collateral is consumer goods, the collateral is not in thepossession of the debtor when the debtor consents to the acceptance; and

(4) Subsection (e) does not require the secured party to dispose ofthe collateral or the debtor waives the requirement pursuant to section400.9-624.

(b) A purported or apparent acceptance of collateral under thissection is ineffective unless:

(1) The secured party consents to the acceptance in an authenticatedrecord or sends a proposal to the debtor; and

(2) The conditions of subsection (a) are met.

(c) For purposes of this section:

(1) A debtor consents to an acceptance of collateral in partialsatisfaction of the obligation it secures only if the debtor agrees to theterms of the acceptance in a record authenticated after default; and

(2) A debtor consents to an acceptance of collateral in fullsatisfaction of the obligation it secures only if the debtor agrees to theterms of the acceptance in a record authenticated after default or thesecured party:

(A) Sends to the debtor after default a proposal that isunconditional or subject only to a condition that collateral not in thepossession of the secured party be preserved or maintained;

(B) In the proposal, proposes to accept collateral in fullsatisfaction of the obligation it secures; and

(C) Does not receive a notification of objection authenticated by thedebtor within twenty days after the proposal is sent.

(d) To be effective under subsection (a)(2), a notification ofobjection must be received by the secured party:

(1) In the case of a person to which the proposal was sent pursuantto section 400.9-621, within twenty days after notification was sent tothat person; and

(2) In other cases:

(A) Within twenty days after the last notification was sent pursuantto section 400.9-621; or

(B) If a notification was not sent, before the debtor consents to theacceptance under subsection (c).

(e) A secured party that has taken possession of collateral shalldispose of the collateral pursuant to section 400.9-610 within the timespecified in subsection (f) if:

(1) Sixty percent of the cash price has been paid in the case of apurchase-money security interest in consumer goods; or

(2) Sixty percent of the principal amount of the obligation securedhas been paid in the case of a non-purchase-money security interest inconsumer goods.

(f) To comply with subsection (e), the secured party shall dispose ofthe collateral:

(1) Within ninety days after taking possession; or

(2) Within any longer period to which the debtor and all secondaryobligors have agreed in an agreement to that effect entered into andauthenticated after default.

(g) In a consumer transaction, a secured party may not acceptcollateral in partial satisfaction of the obligation it secures.

(L. 2001 S.B. 288)

Effective 7-01-01