Strict Foreclosure Flashcards

1
Q

General Rule

A

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).

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