(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 this chapter.
HISTORY: 2001 Act No. 67, Section 12. "Agricultural lien" Section 36-9-102(a)(5) "Collateral" Section 36-9-102(a)(12) "Debtor" Section 36-9-102(a)(28) "Secured party" Section 36-9-102(a)(72) "Security interest" Section 36-1-201(37) [see now Section 36-1-203]