Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral
Wis. Stat. § 409.620
in effect(1) Conditions to acceptance in satisfaction. Except as otherwise provided in sub. (7), a secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:
(a) The debtor consents to the acceptance under sub. (3);
(b) The secured party does not receive, within the time set forth in sub. (4), a notification of objection to the proposal authenticated by:
1. A person to which the secured party was required to send a proposal under s. 409.621; or
2. 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;
(c) If the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance; and
(d) Subsection (5) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to s. 409.624.
(2) Purported acceptance ineffective. A purported or apparent acceptance of collateral under this section is ineffective unless:
(a) The secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and
(b) The conditions of sub. (1) are met.
(3) Debtor’s consent. For purposes of this section:
(a) 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 authenticated after default; and
(b) 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 authenticated after default or the secured party:
1. 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;
2. In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and
3. Does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.
(4) Effectiveness of notification. To be effective under sub. (1) (b), a notification of objection must be received by the secured party:
(a) In the case of a person to which the proposal was sent pursuant to s. 409.621, within 20 days after notification was sent to that person; and
(b) In other cases:
1. Within 20 days after the last notification was sent pursuant to s. 409.621; or
2. If a notification was not sent, before the debtor consents to the acceptance under sub. (3).
(5) Mandatory disposition of consumer goods. A secured party that has taken possession of collateral shall dispose of the collateral pursuant to s. 409.610 within the time specified in sub. (6) if:
(a) Sixty percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or
(b) Sixty percent of the principal amount of the obligation secured has been paid in the case of a nonpurchase-money security interest in consumer goods.
(6) Compliance with mandatory disposition requirement. To comply with sub. (5), the secured party shall dispose of the collateral:
(a) Within 90 days after taking possession; or
(b) Within 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.
(7) No partial satisfaction in consumer transaction. In a consumer transaction, a secured party may not accept collateral in partial satisfaction of the obligation it secures.
Source: WI Statutes (Official Site)URL: https://docs.legis.wisconsin.gov/document/statutes/409.620Fetched: 10/7/2026