8.9A-205 - A-205. Use or disposition of collateral permissible. - Virginia Statutes

§ 8.9A-205. Use or disposition of collateral permissible.

(a) When security interest not invalid or fraudulent. A security interest isnot invalid or fraudulent against creditors solely because:

(1) the debtor has the right or ability to:

(A) use, commingle, or dispose of all or part of the collateral, includingreturned or repossessed goods;

(B) collect, compromise, enforce, or otherwise deal with collateral;

(C) accept the return of collateral or make repossessions; or

(D) use, commingle, or dispose of proceeds; or

(2) the secured party fails to require the debtor to account for proceeds orreplace collateral.

(b) Requirements of possession not relaxed. This section does not relax therequirements of possession if attachment, perfection, or enforcement of asecurity interest depends upon possession of the collateral by the securedparty.

(1964, c. 219, § 8.9-205; 1973; c. 509; 2000, c. 1007.)