{"data":{"id":"us-nj/n.j.-stat.-12a-9-620","jurisdiction":"us-nj","citation":"N.J. Stat. § 12A:9-620","heading":"Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.","body":"Acceptance of Collateral in Full or Partial Satisfaction of Obligation; Compulsory Disposition of Collateral.\n(a)\tConditions 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:\n(1)\tthe debtor consents to the acceptance under subsection (c);\n(2)\tthe secured party does not receive, within the time set forth in subsection (d), a notification of objection to the proposal authenticated by:\n(A)\ta person to which the secured party was required to send a proposal under 12A:9-621; or\n(B)\tany other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that is the subject of the proposal;\n(3)\tif the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and\n(4)\tsubsection (e) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to 12A:9-624.\n(b)\tPurported acceptance ineffective.  A purported or apparent acceptance of collateral under this section is ineffective unless:\n(1)\tthe secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and\n(2)\tthe conditions of subsection  (a) are met.\n(c)\tDebtor's consent.  For purposes of this section:\n(1)\ta 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; and\n(2)\ta 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:\n(A)\tsends 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;\n(B)\tin the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and\n(C)\tdoes not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.\n(d)\tEffectiveness of notification.  To be effective under  subsection (a) (2), a notification of objection must be received by the secured party:\n(1)\tin the case of a person to which the proposal was sent pursuant to 12A:9-621, within 20 days after notification was sent to that person; and\n(2)\tin other cases:\n(A)\twithin 20 days after the last notification was sent pursuant to 12A:9-621; or\n(B)\tif a notification was not sent, before the debtor consents to the acceptance under subsection (c).\n(e)\tMandatory disposition of consumer goods.  A secured party that has taken possession of collateral shall dispose of the collateral pursuant to 12A:9-610 within the time specified in subsection  (f) if:\n(1)\t60 percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or\n(2)\t60 percent of the principal amount of the obligation secured has been paid in the case of a non-purchase-money security interest in consumer goods.\n(f)\tCompliance with mandatory disposition requirement.  To comply with subsection (e), the secured party shall dispose of the collateral:\n(1)\twithin 90 days after taking possession; or\n(2)\twithin 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.\n(g)\tNo partial satisfaction in consumer transaction.  In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.\nL.2001, c.117, s.1; amended 2001, c.386, s.109.","path":["TITLE 12A COMMERCIAL TRANSACTIONS"],"source_url":"https://pub.njleg.state.nj.us/statutes/STATUTES-TEXT.zip","current_through":"P.L.2025, c.405, and J.R.22","vintage":"","retrieved_at":"2026-08-27T17:54:13Z","sha256":"6ddff12c669dc84f58b1f5a9ed15722a6267910d4011a3ed364dc2f0849a119a","source_id":"us-nj","stale":true,"prev":"us-nj/n.j.-stat.-12a-9-619","next":"us-nj/n.j.-stat.-12a-9-621"},"notice":"GroundRules: Original legal text. Not legal advice."}