Strict Foreclosure Flashcards
General Rule
After default and repossession, the secured party may retain the collateral in full or partial satisfaction of the debt (in other words,the secured party may make a full or partial strict foreclosure) if the secured party does the following:
* The secured party must send its proposal to retain the collateral to (1) any other secured party from whom the foreclosing party has received notice of a claim to the collateral, and (2) any other secured party who has perfected a security interest in the collateral
by filing a financing statement or noting its security interest on a certificate of title. If a notified party objects within 20 days after the secured party sends the notice, the collateral must be disposed of by sale.
* The secured party must also obtain the debtor’s consent. The debtor consents by either: (1) agreeing in an authenticated record after default, or (2) in the case of a full strict foreclosure, failing to make an authenticated objection within 20 days after the secured party sends notice (a debtor can’t consent to a partial strict foreclosure in this manner).
