(a) Effect of acceptance. A secured party’s acceptance of collateral in full or partial satisfaction of the obligation it secures:(1) discharges the obligation to the extent consented to by the debtor;(2) transfers to the secured party all of a debtor’s rights in the collateral;(3) 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(4) terminates any other subordinate interest.(b) Discharge of subordinate interest notwithstanding noncompliance. A subordinate interest is discharged or terminated under subsection (a), even if the secured party fails to comply with this article.(Act 2001-481, p. 647, §1.)
Alabama Legal Code