(a)  Effect of acceptance.  A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:

(1)  discharges the obligation to the extent consented to by the debtor;

(2)  transfers to the secured party all of a debtor’s rights in the collateral;

(3)  discharges the security interest or agricultural lien that is the subject of the debtor’s consent and any subordinate security interest or subordinate lien; and

(4)  terminates any other subordinate interest.

(b)  Discharge of subordinate interest notwithstanding noncompliance.  A subordinate interest is discharged or terminated under Subsection (a), even if the secured party fails to comply with this Chapter.

Acts 2001, No. 128, §1, eff. July 1, 2001.