2023 New Mexico Statutes › Chapter 55 - Uniform Commercial Code › Article 9 - Secured Transactions › Part 6 - DEFAULT › Subpart 1 - DEFAULT AND ENFORCEMENT OFSECURITY INTEREST › Section 55-9-620 - Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral. (Effective January 1, 2024.)

(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 55-9-621 NMSA 1978; 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 55-9-624 NMSA 1978.
(b) A purported or apparent acceptance of collateral under this section is ineffective unless:
(1) the secured party consents to the acceptance in a signed record or sends a proposal to the debtor; and
(2) the conditions of Subsection (a) of this section are met.
(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 55-9-621 NMSA 1978, 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 55-9-621 NMSA 1978; 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 55-9-610 NMSA 1978 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.
History:
1978 Comp., § 55-9-620, enacted by Laws 2001, ch. 139, § 117; 2021, ch. 86, § 3; 2023, ch. 142, § 91.
ANNOTATIONS
The 2023 amendment,
effective January 1, 2024, substituted each occurrence of "authenticated" with "signed" throughout the section.