Iowa Code § 554.9620 — IA Code / Title XIII / Chapter 554 / Section 554.9620
Acceptance of collateral in full or partial satisfaction of obligation — compulsory disposition of collateral.
Status: in_force

(1) Except as otherwise provided in subsection 7, a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:

(1) (a) the debtor consents to the acceptance under subsection 3;

(1) (b) the secured party does not receive, within the time set forth in subsection 4, a notification of objection to the proposal signed by:

(1) (b) a person to which the secured party was required to send a proposal under section 554.9621; or

(1) (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;

(1) (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

(1) (d) subsection 5 does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to section 554.9624.

(2) A purported or apparent acceptance of collateral under this section is ineffective unless:

(2) (a) the secured party consents to the acceptance in a signed record or sends a proposal to the debtor; and

(2) (b) the conditions of subsection 1 are met.

(3) For purposes of this section:

(3) (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 signed after default; and

(3) (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 signed after default or the secured party:

(3) (b) 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;

(3) (b) in the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and

(3) (b) does not receive a notification of objection signed by the debtor within twenty days after the proposal is sent.

(4) To be effective under subsection 1, paragraph “b”, a notification of objection must be received by the secured party:

(4) (a) in the case of a person to which the proposal was sent pursuant to section 554.9621, within twenty days after notification was sent to that person; and

(4) (b) in other cases:

(4) (b) within twenty days after the last notification was sent pursuant to section 554.9621; or

(4) (b) if a notification was not sent, before the debtor consents to the acceptance under subsection 3.

(5) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to section 554.9610 within the time specified in subsection 6 if:

(5) (a) sixty percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or

(5) (b) 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.

(6) To comply with subsection 5, the secured party shall dispose of the collateral:

(6) (a) within ninety days after taking possession; or

(6) (b) within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and signed after default.

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

2000 Acts, ch 1149, §118, 187; 2024 Acts, ch 1023, §99 – 102