(a) Except as otherwise provided in Subsection (g) of this section, a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:

Ask a business law question, get an answer ASAP!
Thousands of highly rated, verified business lawyers.
Click here to chat with a lawyer about your rights.

(1)     the debtor consents to the acceptance under Subsection (c) of this section;

(2)     the secured party does not receive, within the time set forth in Subsection (d) of this section, a notification of objection to the proposal signed by:

(A) a person to which the secured party was required to send a proposal under Section 55-9-621 N.M. Stat. Ann.; or

(B) any other person, other than the debtor, holding an interest in the collateral subordinate to the security interest that 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; and

(4)     Subsection (e) of this section does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to Section 55-9- 624 NMSA 1978.

(b) A purported or apparent acceptance of collateral under this section is ineffective unless:

(1)     the secured party consents to the acceptance in a signed record or sends a proposal to the debtor; and

(2)     the conditions of Subsection (a) of this section are met. (c) 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 signed after default; and

(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 signed after default or the secured party:

(A) sends 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;

(B) in the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and

(C) does not receive a notification of objection signed by the debtor within twenty days after the proposal is sent.

(d) To be effective under Paragraph (2) of Subsection (a) of this section, 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 55-9-621 N.M. Stat. Ann., within twenty days after notification was sent to that person; and

(2)     in other cases:

(A) within twenty days after the last notification was sent pursuant to section 55-9-621 N.M. Stat. Ann.; or

(B) if a notification was not sent, before the debtor consents to the acceptance under Subsection (c) of this section.

(e) A secured party that has taken possession of collateral shall dispose of the collateral pursuant to Section 55-9-610 N.M. Stat. Ann. within the time specified in Subsection (f) of this section if:

(1)     sixty percent of the cash price has been paid in the case of a purchase- money security interest in consumer goods; or

(2)     sixty 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.

(f) To comply with Subsection (e) of this section, the secured party shall dispose of the collateral:

(1)     within ninety 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 signed after default.

(g) In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.