Chapter 409

409.617(3)(a) (a) The debtor’s rights in the collateral;

409.617(3)(b) (b) The security interest or agricultural lien under which the disposition is made; and

409.617(3)(c) (c) Any other security interest or other lien.

409.617 History History: 2001 a. 10; 2003 a. 63.

409.618 409.618 Rights and duties of certain secondary obligors.

409.618(1) (1) Rights and duties of secondary obligor. A secondary obligor acquires the rights and becomes obligated to perform the duties of the secured party after the secondary obligor:

409.618(1)(a) (a) Receives an assignment of a secured obligation from the secured party;

409.618(1)(b) (b) Receives a transfer of collateral from the secured party and agrees to accept the rights and assume the duties of the secured party; or

409.618(1)(c) (c) Is subrogated to the rights of a secured party with respect to collateral.

409.618(2) (2) Effect of assignment, transfer, or subrogation. An assignment, transfer, or subrogation described in sub. (1):

409.618(2)(a) (a) Is not a disposition of collateral under s. 409.610; and

409.618(2)(b) (b) Relieves the secured party of further duties under this chapter.

409.618 History History: 2001 a. 10.

409.619 409.619 Transfer of record or legal title.

409.619(1) (1) Transfer statement. In this section, “transfer statement” means a record authenticated by a secured party stating:

409.619(1)(a) (a) That the debtor has defaulted in connection with an obligation secured by specified collateral;

409.619(1)(b) (b) That the secured party has exercised its postdefault remedies with respect to the collateral;

409.619(1)(c) (c) That, by reason of the exercise, a transferee has acquired the rights of the debtor in the collateral; and

409.619(1)(d) (d) The name and mailing address of the secured party, debtor, and transferee.

409.619(2) (2) Effect of transfer statement. A transfer statement entitles the transferee to the transfer of record of all rights of the debtor in the collateral specified in the statement in any official filing, recording, registration, or certificate-of-title system covering the collateral. If a transfer statement is presented with the applicable fee and request form to the official or office responsible for maintaining the system, the official or office shall:

409.619(2)(a) (a) Accept the transfer statement;

409.619(2)(b) (b) Promptly amend its records to reflect the transfer; and

409.619(2)(c) (c) If applicable, issue a new appropriate certificate of title in the name of the transferee.

409.619(3) (3) Transfer not a disposition; no relief of secured party’s duties. A transfer of the record or legal title to collateral to a secured party under sub. (2) or otherwise is not of itself a disposition of collateral under this chapter and does not of itself relieve the secured party of its duties under this chapter.

409.619 History History: 2001 a. 10.

409.620 409.620 Acceptance of collateral in full or partial satisfaction of obligation; compulsory disposition of collateral.

409.620(1) (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:

409.620(1)(a) (a) The debtor consents to the acceptance under sub. (3);

409.620(1)(b) (b) The secured party does not receive, within the time set forth in sub. (4), a notification of objection to the proposal authenticated by:

409.620(1)(b)1. 1. A person to which the secured party was required to send a proposal under s. 409.621; or

409.620(1)(b)2. 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;

409.620(1)(c) (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

409.620(1)(d) (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.

409.620(2) (2) Purported acceptance ineffective. A purported or apparent acceptance of collateral under this section is ineffective unless:

409.620(2)(a) (a) The secured party consents to the acceptance in an authenticated record or sends a proposal to the debtor; and

409.620(2)(b) (b) The conditions of sub. (1) are met.

409.620(3) (3) Debtor’s consent. For purposes of this section:

409.620(3)(a) (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

409.620(3)(b) (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:

409.620(3)(b)1. 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;

409.620(3)(b)2. 2. In the proposal, proposes to accept collateral in full satisfaction of the obligation it secures; and

409.620(3)(b)3. 3. Does not receive a notification of objection authenticated by the debtor within 20 days after the proposal is sent.

409.620(4) (4) Effectiveness of notification. To be effective under sub. (1) (b), a notification of objection must be received by the secured party:

409.620(4)(a) (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

409.620(4)(b) (b) In other cases:

409.620(4)(b)1. 1. Within 20 days after the last notification was sent pursuant to s. 409.621; or

409.620(4)(b)2. 2. If a notification was not sent, before the debtor consents to the acceptance under sub. (3).

409.620(5) (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:

409.620(5)(a) (a) Sixty percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or

409.620(5)(b) (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.

409.620(6) (6) Compliance with mandatory disposition requirement. To comply with sub. (5), the secured party shall dispose of the collateral:

409.620(6)(a) (a) Within 90 days after taking possession; or

409.620(6)(b) (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.

409.620(7) (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.

409.620 History History: 2001 a. 10.

409.621 409.621 Notification of proposal to accept collateral.

409.621(1) (1) Persons to which proposal to be sent. A secured party that desires to accept collateral in full or partial satisfaction of the obligation it secures shall send its proposal to:

409.621(1)(a) (a) Any person from which the secured party has received, before the debtor consented to the acceptance, an authenticated notification of a claim of an interest in the collateral;

409.621(1)(b) (b) Any other secured party or lienholder that, 10 days before the debtor consented to the acceptance, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:

409.621(1)(b)1. 1. Identified the collateral;

409.621(1)(b)2. 2. Was indexed under the debtor’s name as of that date; and

409.621(1)(b)3. 3. Was filed in the office or offices in which to file a financing statement against the debtor covering the collateral as of that date; and

409.621(1)(c) (c) Any other secured party that, 10 days before the debtor consented to the acceptance, held a security interest in the collateral perfected by compliance with a statute, regulation, or treaty described in s. 409.311 (1).

409.621(2) (2) Proposal to be sent to secondary obligor in partial satisfaction. A secured party that desires to accept collateral in partial satisfaction of the obligation it secures shall send its proposal to any secondary obligor in addition to the persons described in sub. (1).

409.621 History History: 2001 a. 10.

409.622 409.622 Effect of acceptance of collateral.

409.622(1) (1) Effect of acceptance. A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:

409.622(1)(a) (a) Discharges the obligation to the extent consented to by the debtor;

409.622(1)(b) (b) Transfers to the secured party all of a debtor’s rights in the collateral;

409.622(1)(c) (c) 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

409.622(1)(d) (d) Terminates any other subordinate interest.

409.622(2) (2) Discharge of subordinate interest notwithstanding noncompliance. A subordinate interest is discharged or terminated under sub. (1), even if the secured party fails to comply with this chapter.

409.622 History History: 2001 a. 10.

409.623 409.623 Right to redeem collateral.

409.623(1) (1) Persons that may redeem. A debtor, any secondary obligor, or any other secured party or lienholder may redeem collateral.

409.623(2) (2) Requirements for redemption. To redeem collateral, a person shall tender:

409.623(2)(a) (a) Fulfillment of all obligations secured by the collateral; and

409.623(2)(b) (b) The reasonable expenses and attorney fees described in s. 409.615 (1) (a).

409.623(3) (3) When redemption may occur. A redemption may occur at any time before a secured party:

409.623(3)(a) (a) Has collected collateral under s. 409.607;

409.623(3)(b) (b) Has disposed of collateral or entered into a contract for its disposition under s. 409.610; or

409.623(3)(c) (c) Has accepted collateral in full or partial satisfaction of the obligation it secures under s. 409.622.

409.623 History History: 2001 a. 10.

409.624 409.624 Waiver.

409.624(1) (1) Waiver of disposition notification. A debtor or secondary obligor may waive the right to notification of disposition of collateral under s. 409.611 only by an agreement to that effect entered into and authenticated after default.

409.624(2) (2) Waiver of mandatory disposition. A debtor may waive the right to require disposition of collateral under s. 409.620 (5) only by an agreement to that effect entered into and authenticated after default.

409.624(3) (3) Waiver of redemption right. Except in a consumer-goods transaction, a debtor or secondary obligor may waive the right to redeem collateral under s. 409.623 only by an agreement to that effect entered into and authenticated after default.

409.624 History History: 2001 a. 10.

409.625 409.625 Remedies for secured party’s failure to comply with chapter.