§ 25-9-622. Effect of acceptance of collateral. - North Carolina Statutes

§25‑9‑622.  Effect of acceptance of collateral.

(a)        Effect ofacceptance. – A secured party's acceptance of collateral in full or partialsatisfaction of the obligation it secures:

(1)        Discharges theobligation to the extent consented to by the debtor;

(2)        Transfers to thesecured party all of a debtor's rights in the collateral;

(3)        Discharges thesecurity interest or agricultural lien that is the subject of the debtor'sconsent and any subordinate security interest or other subordinate lien; and

(4)        Terminates any othersubordinate interest.

(b)        Discharge ofsubordinate interest notwithstanding noncompliance. – A subordinate interest isdischarged or terminated under subsection (a) of this section, even if thesecured party fails to comply with this Article. (2000‑169, s. 1.)