- (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.
Source: SL 2000, ch 231 .