(a) 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 other subordinate lien; and
- (4) terminates any other subordinate interest.
- (b) A subordinate interest is discharged or terminated under subsection (a), even if the secured party fails to comply with IC 26-1-9.1 .
As added by P.L.57-2000, SEC.45.