2023 New York Laws › UCC - Uniform Commercial Code › Article 9 - Secured Transactions › Part 6 - Default › Sub Part 1 - Default and Enforcement of Security Interest › 9-620 - Acceptance of Collateral in Full or Partial Satisfaction of Obligation; Compulsory Disposition of Collateral

Section 9--620. Acceptance of Collateral in Full or Partial Satisfaction
of Obligation; Compulsory Disposition of Collateral.
(a) Conditions  to  acceptance  in satisfaction.   Except as otherwise
provided in  subsections  (g)  and  (h),  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);
(2) the secured party does not receive, within the time set forth
in  subsection  (d),  a  notification  of  objection  to  the
proposal authenticated by:
(A) a  person to which the secured party was required to send
a proposal under Section 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) does not require the secured party to dispose
of the  collateral  or  the  debtor  waives  the  requirement
pursuant to Section 9--624.
(b) Purported   acceptance   ineffective.   A  purported  or  apparent
acceptance of collateral under this section is ineffective unless:
(1) the  secured  party  consents  to  the   acceptance   in   an
authenticated record or sends a proposal to the debtor; and
(2) the conditions of subsection (a) are met.
(c) Debtor's consent. 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
authenticated 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
authenticated 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
authenticated by the debtor within twenty days after  the
proposal is sent.
(d) Effectiveness  of  notification.  To be effective under subsection
(a)(2), 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 9--621, within 20 days after notification
was sent to that person; and
(2) in other cases:
(A) within 20 days  after  the  last  notification  was  sent
pursuant to Section 9--621; or
(B) if  a  notification  was  not  sent,  before  the  debtor
consents to the acceptance under subsection (c).
(e) Mandatory disposition of consumer goods. A secured party that  has
taken  possession of collateral shall dispose of the collateral pursuant
to Section 9--610 within the time specified in subsection (f) 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) Compliance  with mandatory disposition requirement. To comply with
subsection (e), the secured party shall dispose of the collateral:
(1) within 90 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 authenticated after default.
(g) No  partial  satisfaction  in  consumer transaction. In a consumer
transaction, a secured  party  may  not  accept  collateral  in  partial
satisfaction of the obligation it secures.
(h)  Special  provisions  for  cooperative  interests. A secured party
whose collateral consists of a residential cooperative interest used  by
the  debtor  and  whose  security interest in such collateral secures an
obligation incurred in connection with financing or refinancing  of  the
acquisition  of such cooperative interest and who chooses to accept that
cooperative interest in full satisfaction of the debtor's obligation may
do so.
(1) If the secured party sends a  proposal  to  take  the  cooperative
interest  in  full satisfaction of the debtor's obligation, the proposal
shall be accompanied by a notice in the form and  manner  prescribed  in
subsection  (f)  of  section  9-611  of this subpart, unless the secured
party has previously sent the debtor such notice. A debtor  consents  to
an  acceptance  of  a  cooperative  interest in full satisfaction of the
obligation it secures only if the debtor agrees  to  the  terms  of  the
proposal in a record authenticated after default.
(2)  A  debtor  may  propose  to  the  secured  party that it take the
cooperative interest in full satisfaction of the obligation it  secures.
The  proposal  shall be ineffective unless the secured party consents to
the proposal in an authenticated record.