SENATE BILL 216

53rd legislature - STATE OF NEW MEXICO - second session, 2018

INTRODUCED BY

William H. Payne

AN ACT

RELATING TO SECURED TRANSACTIONS; CONFORMING A PROVISION TO THE OFFICIAL TEXT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 55-9-620 NMSA 1978 (being Laws 2001, Chapter 139, Section 117) is amended to read:

     "55-9-620. ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL SATISFACTION OF OBLIGATION--COMPULSORY DISPOSITION OF COLLATERAL.--

          (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:

                (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 authenticated by:

                     (A) a person to which the secured party was required to send a proposal under Section 55-9-621 NMSA 1978; 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 an authenticated 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 authenticated 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 authenticated 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 authenticated 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 NMSA 1978, 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 NMSA 1978; 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 NMSA 1978 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 authenticated after default.

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