Iowa Code 554.9622 – Effect of acceptance of collateral
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1.
Effect of acceptance.
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.
Terms Used In Iowa Code 554.9622
- Lien: A claim against real or personal property in satisfaction of a debt.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
2.
Discharge of subordinate interest notwithstanding noncompliance.
A subordinate interest is discharged or terminated under subsection 1, even if the secured party fails to comply with this Article.