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Ark. Code Ann. § 4-9-620

Acceptance of collateral in full or partial satisfaction of obligation — Compulsory disposition of collateral

Known as the Uniform Commercial Code

The act spans §§ 4–4 (597 sections).

Acts 2001, No. 1439, § 1.

(1) Except as otherwise provided in subsection (g), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if: the debtor consents to the acceptance under subsection (c);

(2) the secured party does not receive, within the time set forth in subsection (d), a notification of objection to the proposal authenticated by: a person to which the secured party was required to send a proposal under § 4-9-621; or

(3) 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;

(4) if the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and

(5) subsection (e) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to § 4-9-624.

(6) A purported or apparent acceptance of collateral under this section is ineffective unless: the secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and

(7) the conditions of subsection (a) are met.

(8) For purposes of this section: 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

(9) 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: 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;

(10) in the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and

(11) does not receive a notification of objection authenticated by the debtor within twenty (20) days after the proposal is sent.

(12) To be effective under subsection (a)(2), a notification of objection must be received by the secured party: in the case of a person to which the proposal was sent pursuant to § 4-9-621, within twenty (20) days after notification was sent to that person; and

(13) in other cases: within twenty (20) days after the last notification was sent pursuant to § 4-9-621; or

(14) if a notification was not sent, before the debtor consents to the acceptance under subsection (c).

(15) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to § 4-9-610 within the time specified in subsection (f) if: sixty percent (60%) of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or

(16) sixty percent (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.

(17) To comply with subsection (e), the secured party shall dispose of the collateral: within ninety (90) days after taking possession; or

(18) 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.

(19) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.

Current official text: Arkansas General Assembly. Digitized from the UniCourt Code Improvement Commission public-domain capture. Reproduced from public-domain Arkansas statutes; confirm against the official source for the current text. Not legal advice.