Pennsylvania Consolidated & Unconsolidated Statutes
Chapter 96 - Default
Section 9620 - Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral


(a) Conditions to acceptance in satisfaction.--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 all of the following paragraphs apply:
(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:
(i) a person to which the secured party was required to send a proposal under section 9621 (relating to notification of proposal to accept collateral); or
(ii) any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest which 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.
(4) Subsection (e) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to section 9624 (relating to waiver).
(b) Purported acceptance ineffective.--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) Debtor's consent.--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.
(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:
(i) sends to the debtor after default a proposal which is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained;
(ii) in the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and
(iii) does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.
(d) Effectiveness of notification.--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 9621, within 20 days after notification was sent to that person.
(2) In other cases:
(i) within 20 days after the last notification was sent pursuant to section 9621; or
(ii) if a notification was not sent, before the debtor consents to the acceptance under subsection (c).
(e) Mandatory disposition of consumer goods.--A secured party that has taken possession of collateral shall dispose of the collateral pursuant to section 9610 (relating to disposition of collateral after default) within the time specified in subsection (f) if:
(1) 60% of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or
(2) 60% of the principal amount of the obligation secured has been paid in the case of a nonpurchase-money security interest in consumer goods.
(f) Compliance with mandatory disposition requirement.--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) No partial satisfaction in consumer transaction.--In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.

Cross References. Section 9620 is referred to in sections 9102, 9408, 9602, 9624 of this title; section 5108 of Title 12 (Commerce and Trade).

Structure Pennsylvania Consolidated & Unconsolidated Statutes

Pennsylvania Consolidated & Unconsolidated Statutes

Title 13 - COMMERCIAL CODE

Chapter 96 - Default

Extra - Chapter Notes

Section 9601 - Rights after default; judicial enforcement; consignor or buyer of accounts, chattel paper, payment intangibles or promissory notes

Section 9602 - Waiver and variance of rights and duties

Section 9603 - Agreement on standards concerning rights and duties

Section 9604 - Procedure if security agreement covers real property or fixtures

Section 9605 - Unknown debtor or secondary obligor

Section 9606 - Time of default for agricultural lien

Section 9607 - Collection and enforcement by secured party

Section 9608 - Application of proceeds of collection or enforcement; liability for deficiency and right to surplus

Section 9609 - Secured party's right to take possession after default

Section 9610 - Disposition of collateral after default

Section 9611 - Notification before disposition of collateral

Section 9612 - Timeliness of notification before disposition of collateral

Section 9613 - Contents and form of notification before disposition of collateral: general

Section 9614 - Contents and form of notification before disposition of collateral: consumer-goods transaction

Section 9615 - Application of proceeds of disposition; liability for deficiency and right to surplus

Section 9616 - Explanation of calculation of surplus or deficiency

Section 9617 - Rights of transferee of collateral

Section 9618 - Rights and duties of certain secondary obligors

Section 9619 - Transfer of record or legal title

Section 9620 - Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral

Section 9621 - Notification of proposal to accept collateral

Section 9622 - Effect of acceptance of collateral

Section 9623 - Right to redeem collateral

Section 9624 - Waiver

Section 9625 - Remedies for secured party's failure to comply with division

Section 9626 - Action in which deficiency or surplus is in issue

Section 9627 - Determination of whether conduct was commercially reasonable

Section 9628 - Nonliability and limitation on liability of secured party; liability of secondary obligor