Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral
La. R.S. 10:9-620
in effect10:9-620. Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral
(a) Conditions to acceptance in satisfaction. A secured party may accept collateral in full or partial satisfaction of the obligation it secures only if:
(1) the debtor consents to the acceptance under Subsection (c);
(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 R.S. 10:9-621; 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) does not require the secured party to dispose of the collateral or the debtor waives the requirement pursuant to R.S. 10:9-624.
(b) Purported acceptance ineffective. 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) are met.
(c) Debtor's consent. 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) Effectiveness of notification. To be effective under Subsection (a)(2), 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 R.S. 10:9-621, 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 R.S. 10:9-621; or
(B) if a notification was not sent, before the debtor consents to the acceptance under Subsection (c).
(e) Mandatory disposition of consumer goods. A secured party that has taken possession of collateral shall dispose of the collateral pursuant to R.S. 10: 9-610 or alternatively shall execute upon the security interest within the time specified in Subsection (f) 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) Compliance with mandatory disposition requirement. To comply with Subsection (e) of this Section, the secured party shall dispose of the collateral or alternatively institute judicial proceedings to execute upon the security interest:
(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) [Reserved.]
(h) Partial satisfaction in consumer transaction. In a consumer transaction in which a secured party accepts collateral in partial satisfaction of the obligation it secures, the terms agreed to by the debtor under Subsection (c)(1) shall include a writing that:
(1) states that the debtor will still owe the deficiency even though the secured party accepts the collateral and reduces the debt;
(2) states the amount of the deficiency;
(3) provides an explanation in accordance with Subsection (i) of how the secured party calculated the deficiency; and
(4) states, if applicable, that future debits, credits, charges, including additional credit service charges or interest, rebates, and expenses may affect the amount of the deficiency.
(i) Required information. To comply with Subsection (h)(3), a writing must provide the following information in the following order:
(1) the aggregate amount of obligations secured by the collateral proposed to be accepted in partial satisfaction, and, if the amount reflects a rebate of unearned interest or credit service charge, an indication of that fact, calculated as of a specified date not more than thirty-five days before the debtor's consent;
(2) the amount of partial satisfaction of the obligations;
(3) the aggregate amount of the obligations after deducting the amount of partial satisfaction;
(4) the amount, in the aggregate or by type, and types of credit, including rebates of interest or credit service charges, to which the obligor is known to be entitled and which are not reflected in the amount in Paragraph (i)(1); and
(5) the amount of the deficiency.
(j) Substantial compliance. A particular phrasing of the explanation is not required. An explanation complying substantially with the requirements of Subsection (h) is sufficient, even if it includes minor errors that are not seriously misleading.
Acts 2001, No. 128, §1, eff. July 1, 2001; Acts 2024, No. 773, §1.
Source: Louisiana State Legislature (legis.la.gov)URL: https://legis.la.gov/legis/Law.aspx?d=74505Fetched: 10/20/2026