{"data":{"id":"us-nc/n.c.-gen.-stat.-25-9-205","jurisdiction":"us-nc","citation":"N.C. Gen. Stat. § 25-9-205","heading":"Use or disposition of collateral permissible.","body":"(a)\tWhen security interest not invalid or fraudulent. - A security interest is not invalid or fraudulent against creditors solely because:\n(1)\tThe debtor has the right or ability to:\na.\tUse, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;\nb.\tCollect, compromise, enforce, or otherwise deal with collateral;\nc.\tAccept the return of collateral or make repossessions; or\nd.\tUse, commingle, or dispose of proceeds; or\n(2)\tThe secured party fails to require the debtor to account for proceeds or replace collateral.\n(b)\tRequirements of possession not relaxed. - This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party. (1945, c. 196, s. 7; 1965, c. 700, s. 1; 1975, c. 862, s. 7; 2000-169, s. 1.)","path":["Chapter 25. Uniform Commercial Code.","Article 9. Secured Transactions.","Part 2. Effectiveness of Security Agreement; Attachment of Security Interest; Rights of Parties to Security Agreement."],"source_url":"https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_25/GS_25-9-205.html","current_through":"S.L. 2026-30","vintage":"","retrieved_at":"2026-08-27T17:58:47Z","sha256":"0bbc37e81c9a62b8cc3a8eba37124f68a70ba48affd072863a0a5152ca667d39","source_id":"us-nc","stale":false,"prev":"us-nc/n.c.-gen.-stat.-25-9-204","next":"us-nc/n.c.-gen.-stat.-25-9-206"},"notice":"GroundRules: Original legal text. Not legal advice."}