(a) Except as otherwise provided in subdivision (g), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if all of the following conditions are satisfied:
(1) The debtor consents to the acceptance under subdivision (c).
(2) The secured party does not receive, within the time set forth in subdivision (d), a notification of objection to the proposal authenticated by either of the following:
(A) A person to which the secured party was required to send a proposal under Section 9621.
(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.
(4) Subdivision (e) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to Section 9624.
(b) A purported or apparent acceptance of collateral under this section is ineffective unless both of the following conditions are satisfied:
(1) The secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor.
(2) The conditions of subdivision (a) are met.
(c) For purposes of this section both of the following rules apply:
(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.
(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 does all of the following:
(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.
(C) Does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.
(d) To be effective under paragraph (2) of subdivision (a), a notification of objection must be received by the secured party as follows:
(1) In the case of a person to which the proposal was sent pursuant to Section 9621, within 20 days after notification was sent to that person.
(2) In other cases, in accordance with either of the following:
(A) Within 20 days after the last notification was sent pursuant to Section 9621.
(B) If a notification was not sent, before the debtor consents to the acceptance under subdivision (c).
(e) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to Section 9610 within the time specified in subdivision (f) if either of the following conditions has been satisfied:
(1) Sixty percent of the cash price has been paid in the case of a purchase money security interest in consumer goods.
(2) Sixty percent of the principal amount of the obligation secured has been paid in the case of a nonpurchase money security interest in consumer goods.
(f) To comply with subdivision (e), the secured party shall dispose of the collateral within either of the following time periods:
(1) Within 90 days after taking possession.
(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) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.
(Added by Stats. 1999, Ch. 991, Sec. 35. Effective January 1, 2000. Operative July 1, 2001, by Sec. 75 of Ch. 991 and Section 9701.)
Last modified: October 25, 2018