N.D. Cent. Code § 41-09-115

Current through 2023 Legislative Sessions

Section 41-09-115 - (9-620) Acceptance of collateral in full or partial satisfaction of obligation - Compulsory disposition of collateral

1. A secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:

a. The debtor consents to the acceptance under subsection 3;

b. The secured party does not receive, within the time set forth in subsection 4, a notification of objection to the proposal signed by:

(1) A person to which the secured party was required to send a proposal under section 41-09-116; or

(2) 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.

2. A purported or apparent acceptance of collateral under this section is ineffective unless:

a. The secured party consents to the acceptance in a signed record or sends a proposal to the debtor; and

b. The conditions of subsection 1 are met.

3. For purposes of this section:

a. 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 signed after default; and

b. 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 signed after default or the secured party:

(1) 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;

(2) In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and

(3) Does not receive a notification of objection signed by the debtor within twenty days after the proposal is sent.

4. To be effective under subdivision c of subsection 1, a notification of objection must be received by the secured party:

a. In the case of a person to which the proposal was sent pursuant to section 41-09-116, within twenty days after notification was sent to that person; and

b. In other cases:

(1) Within twenty days after the last notification was sent pursuant to section 41-09-116; or

(2) If a notification was not sent, before the debtor consents to the acceptance under subsection 3.

N.D.C.C. § 41-09-115

Amended by S.L. 2023 , ch. 371( HB 1082 ), § 84, eff. 8/1/2023.