Tex.
Bus. & Com. Code Section 9.620
Acceptance of Collateral in Full or Partial Satisfaction of Obligation; Compulsory Disposition of Collateral
(a)
Except as otherwise provided in Subsection (g), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:(1)
the debtor consents to the acceptance under Subsection (c);(2)
the secured party does not receive, within the time set forth in Subsection (d), a notification of objection to the proposal authenticated by:(A)
a person to which the secured party was required to send a proposal under Section 9.621 (Notification of Proposal to Accept Collateral); or(B)
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;(3)
if the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and(4)
Subsection (e) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to Section 9.624 (Waiver).(b)
A purported or apparent acceptance of collateral under this section is ineffective unless:(1)
the secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and(2)
the conditions of Subsection (a) are met.(c)
For purposes of this section:(1)
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 authenticated after default; and(2)
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 authenticated after default or the secured party:(A)
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;(B)
in the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and(C)
does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.(d)
To be effective under Subsection (a)(2), a notification of objection must be received by the secured party:(1)
in the case of a person to which the proposal was sent pursuant to Section 9.621 (Notification of Proposal to Accept Collateral), within 20 days after notification was sent to that person; and(2)
in other cases:(A)
within 20 days after the last notification was sent pursuant to Section 9.621 (Notification of Proposal to Accept Collateral); or(B)
if a notification was not sent, before the debtor consents to the acceptance under Subsection (c).(e)
A secured party that has taken possession of collateral shall dispose of the collateral pursuant to Section 9.610 (Disposition of Collateral After Default) within the time specified in Subsection (f) if:(1)
60 percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or(2)
60 percent of the principal amount of the obligation secured has been paid in the case of a non-purchase-money security interest in consumer goods.(f)
To comply with Subsection (e), the secured party shall dispose of the collateral:(1)
within 90 days after taking possession; or(2)
within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and authenticated after default.(g)
In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.
Source:
Section 9.620 — Acceptance of Collateral in Full or Partial Satisfaction of Obligation; Compulsory Disposition of Collateral, https://statutes.capitol.texas.gov/Docs/BC/htm/BC.9.htm#9.620 (accessed Jun. 5, 2024).
