(1) Except as otherwise provided in subsection (7) of this section, a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:
(a) The debtor consents to the acceptance under subsection (3) of this section;
(b) The secured party does not receive, within the time set forth in subsection (4) of this section, a notification of objection to the proposal signed by:
1. A person to which the secured party was required to send a proposal under KRS 355.9-621; or 2. 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) of this section does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to KRS 355.9- 624.
(2) A purported or apparent acceptance of collateral under this section is ineffective unless:
(a) The secured party consents to the acceptance in a signed record or sends a proposal to the debtor; and (b) The conditions of subsection (1) of this section 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 signed 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 signed after default or the secured party:
1. 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;
2. In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and 3. Does not receive a notification of objection signed by the debtor within twenty (20) days after the proposal is sent.
(4) To be effective under subsection (1)(b) of this section, 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 KRS 355.9- 621, within twenty (20) days after notification was sent to that person; and (b) In other cases:
1. Within twenty (20) days after the last notification was sent pursuant to KRS 355.9-621; or 2. If a notification was not sent, before the debtor consents to the acceptance under subsection (3) of this section.
(5) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to KRS 355.9-610 within the time specified in subsection (6) of this section if:
(a) Sixty percent (60%) of the cash price has been paid in the case of a purchase- money security interest in consumer goods; or (b) 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.
(6) To comply with subsection (5) of this section, the secured party shall dispose of the collateral:
(a) Within ninety (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 signed after default.
(7) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.