| (1) |
Except as otherwise provided in Subsection (7), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:
Terms Used In Utah Code 70A-9a-620- 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.
- Person: means :Utah Code 68-3-12.5
| (a) |
the debtor consents to the acceptance under Subsection (3); |
| (b) |
the secured party does not receive, within the time set forth in Subsection (4), a notification of objection to the proposal authenticated by:
| (i) |
a person to which the secured party was required to send a proposal under Section 70A-9a-621; or |
| (ii) |
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; |
|
| (c) |
if the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and |
| (d) |
Subsection (5) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to Section 70A-9a-624. |
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| (2) |
A purported or apparent acceptance of collateral under this section is ineffective unless:
| (a) |
the secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and |
| (b) |
the conditions of Subsection (1) are met. |
|
| (3) |
For purposes of this section:
| (a) |
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; and |
| (b) |
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:
| (i) |
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; |
| (ii) |
in the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and |
| (iii) |
does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent. |
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| (4) |
To be effective under Subsection (1)(b), a notification of objection must be received by the secured party:
| (a) |
in the case of a person to which the proposal was sent pursuant to Section 70A-9a-621, within 20 days after notification was sent to that person; and |
| (b) |
in other cases:
| (i) |
within 20 days after the last notification was sent pursuant to Section 70A-9a-621; or |
| (ii) |
if a notification was not sent, before the debtor consents to the acceptance under Subsection (3). |
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| (5) |
A secured party that has taken possession of collateral shall dispose of the collateral pursuant to Section 70A-9a-610 within the time specified in Subsection (6) if:
| (a) |
60% of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or |
| (b) |
60% of the principal amount of the obligation secured has been paid in the case of a non-purchase-money security interest in consumer goods. |
|
| (6) |
To comply with Subsection (5), the secured party shall dispose of the collateral:
| (a) |
within 90 days after taking possession; or |
| (b) |
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. |
|
| (7) |
In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures. |
Enacted by Chapter 252, 2000 General Session
