Effect of acceptance of collateral

Effect of acceptance of collateral. (a) A secured party's acceptance of collateral in full or partial satisfaction of the obligation it secures: (i) Discharges the obligation to the extent consented to by the debtor; (ii) Transfers to the secured party all of a debtor's rights in the collateral; (iii) 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 (iv) Terminates any other subordinate interest. (b) A subordinate interest is discharged or terminated under subsection (a), even if the secured party fails to comply with this article.