(a)Effect of acceptance. A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:

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Terms Used In Tennessee Code 47-9-622

  • Lien: A claim against real or personal property in satisfaction of a debt.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
(1) discharges the obligation to the extent consented to by the debtor;
(2) transfers to the secured party all of a debtor’s rights in the collateral;
(3) 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
(4) terminates any other subordinate interest.
(b)Discharge of subordinate interest notwithstanding noncompliance. A subordinate interest is discharged or terminated under subsection (a), even if the secured party fails to comply with this chapter.
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