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(810 ILCS 5/9-620)
Sec. 9-620.
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:
(1) the debtor consents to the acceptance under |
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(2) the secured party does not receive, within the
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| time set forth in subsection (d), a notification of objection to the proposal authenticated by:
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(A) a person to which the secured party was
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| required to send a proposal under Section 9-621; or
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(B) any other person, other than the debtor,
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| holding an interest in the collateral subordinate to the security interest that is the subject of the proposal;
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(3) if the collateral is consumer goods, the
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| collateral is not in the possession of the debtor when the debtor consents to the acceptance; and
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(4) subsection (e) does not require the secured party
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| to dispose of the collateral or the debtor waives the requirement pursuant to Section 9-624.
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(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
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| an authenticated record or sends a proposal to the debtor; and
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(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
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| 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
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(2) a debtor consents to an acceptance of collateral
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| 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:
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(A) sends to the debtor after default a proposal
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| that is unconditional or subject only to a condition that collateral not in the possession of the secured party be preserved or maintained;
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(B) in the proposal, proposes to accept
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| collateral in full satisfaction of the obligation it secures; and
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(C) does not receive a notification of objection
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| authenticated by the debtor within 20 days after the proposal is sent.
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(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
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| sent pursuant to Section 9-621, within 20 days after notification was sent to that person; and
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(2) in other cases:
(A) within 20 days after the last notification
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| was sent pursuant to Section 9-621; or
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(B) if a notification was not sent, before the
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| debtor consents to the acceptance under subsection (c).
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(e) Mandatory disposition of consumer goods. A secured party
that has taken possession of collateral shall dispose of the collateral pursuant to
Section 9-610 within the time specified in subsection (f) if:
(1) 60 percent of the cash price has been paid in the
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| case of a purchase-money security interest in consumer goods; or
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(2) 60 percent of the principal amount of the
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| obligation secured has been paid in the case of a non-purchase-money security interest in consumer goods.
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(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
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| all secondary obligors have agreed in an agreement to that effect entered into and authenticated after default.
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(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.
(Source: P.A. 91-893, eff. 7-1-01.)
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