2023 Colorado Revised Statutes › Title 4 - UNIFORM COMMERCIAL CODE (§§ 4-1-101 — 4-13-306) › Article 9 - SECURED TRANSACTIONS (§§ 4-9-101 — 4-9-809) › Part 6 - DEFAULT (§§ 4-9-601 — 4-9-629) › Section 4-9-620 - Acceptance of collateral in full or partial satisfaction of obligation - compulsory disposition of collateral

(a)
Except as otherwise provided in subsection (g) of this section, 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) of this section;
(2)
The secured party does not receive, within the time set forth in subsection (d) of this section, a notification of objection to the proposal signed by:
(A)
A person to which the secured party was required to send a proposal under section
4-9-621
; 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) of this section does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to section
4-9-624
.
(b)
Reserved.
(c)
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 signed 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 signed 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 signed by the debtor within twenty days after the proposal is sent.
(d)
To be effective under paragraph (2) of subsection (a) of this section, 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
4-9-621
, within twenty days after notification was sent to that person; and
(2)
In other cases:
(A)
Within twenty days after the last notification was sent pursuant to section
4-9-621
; or
(B)
If a notification was not sent, before the debtor consents to the acceptance under subsection (c) of this section.
(e)
A secured party that has taken possession of collateral shall dispose of the collateral pursuant to section
4-9-610
within the time specified in subsection (f) of this section 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)
To comply with subsection (e) of this section, the secured party shall dispose of the collateral:
(1)
Within ninety 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 signed after default.
(g)
In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.
Amended by 2023 Ch. 136,§ 85, eff. 8/7/2023.
L. 2001: Entire article R&RE, p. 1414, § 1, effective July 1.
This section is similar to former § 4-9-505 as it existed prior to 2001.
2023 Ch. 136, was passed without a safety clause. See Colo. Const. art. V, § 1(3).