Effect of acceptance of collateral in satisfaction of obligation.
1. A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:
(a) Discharges the obligation to the extent consented to by the debtor;
(b) Transfers to the secured party all of a debtor’s rights in the collateral;
(c) Discharges the security interest or agricultural lien that is the subject of the debtor’s consent and any subordinate security interest or other subordinate lien; and
(d) Terminates any other subordinate interest.
2. A subordinate interest is discharged or terminated under subsection 1 even if the secured party fails to comply with this article.
Last modified: February 27, 2006