CODE OF VIRGINIA

EFFECT OF ACCEPTANCE OF COLLATERAL (§ 8.9A-622)

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

   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 title.

HISTORY: 2000, c. 1007.