Iowa Code § 554.9622: Effect of acceptance of collateral.

1. A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:

a. discharges the obligation to the extent consented to by the debtor;

b. transfers to the secured party all of a debtor’s rights in the collateral;

c. 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

d. terminates any other subordinate interest.

2. A subordinate interest is discharged or terminated under subsection 1, even if the secured party fails to comply with this Article.