N.D. Cent. Code § 41-09-15
(9-205) Use or disposition of collateral permissible
Redline — December 1, 2021 → current.View current text →
Current — January 1, 2022
As of December 1, 2021
(1) A security interest is not invalid or fraudulent against creditors solely because: The debtor has the right or ability to: Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;
(1) A security interest is not invalid or fraudulent against creditors solely because: The debtor has the right or ability to: Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;
(2) Collect, compromise, enforce, or otherwise deal with collateral;
(2) Collect, compromise, enforce, or otherwise deal with collateral;
(3) Accept the return of collateral or make repossessions; or
(3) Accept the return of collateral or make repossessions; or
(4) Use, commingle, or dispose of proceeds; or
(4) Use, commingle, or dispose of proceeds; or
(5) The secured party fails to require the debtor to account for proceeds or replace collateral.
(5) The secured party fails to require the debtor to account for proceeds or replace collateral.
(6) This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.
(6) This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.
(7) Possessory Security Interests. Subsection (b) makes clear that this section does not relax the requirements for perfection by possession under Section 9-315. If a secured party allows the debtor access to and control over collateral its security interest may be or become unperfected.
(8) Permissible Freedom for Debtor to Enforce Collateral. Former Section 9-205 referred to a debtor’s “liberty…to collect or compromise accounts or chattel paper.” This section recognizes the broader rights of a debtor to “enforce,” as well as to “collect” and “compromise” collateral. This section’s reference to collecting, compromising, and enforcing “collateral” instead of “accounts or chattel paper” contemplates the many other types of collateral that a debtor may wish to “collect, compromise, or enforce”: e.g., deposit accounts, documents, general intangibles, instruments, investment property, and letter-of-credit rights.
Official source: North Dakota Legislative Branch. Reproduced from public-domain North Dakota statutes; confirm against the official source for the current text. Not legal advice.