1. If the debtor has paid sixty percent of the cash price in the case of a purchase money security interest in consumer goods or sixty percent of the loan in the case of another security interest in consumer goods, and has not signed after default a statement renouncing or modifying the debtor's rights under this Part a secured party who has taken possession of collateral must dispose of it under section 554.9504 and if the secured party fails to do so within ninety days after the secured party takes possession the debtor at the debtor's option may recover in conversion or under section 554.9507, subsection 1, on secured party's liability.
2. In any other case involving consumer goods or any other collateral a secured party in possession may, after default, propose to retain the collateral in satisfaction of the obligation. Written notice of such proposal shall be sent to the debtor if the debtor has not signed after default a statement renouncing or modifying the debtor's rights to notice and to object to retention of the collateral in full satisfaction of the obligation, under this subsection. In the case of consumer goods no other notice need be given. In other cases notice shall be sent to any other secured party or lienor from whom the secured party has received (before sending the secured party's notice to the debtor or before the debtor's renunciation of the debtor rights) written notice of a claim of an interest in the collateral. If the secured party receives objection in writing from a person entitled to be sent notification within twenty-one days after the notice was sent, the secured party must dispose of the collateral under section 554.9504. In the absence of such written objection the secured party may retain the collateral in satisfaction of the debtor's obligation. Retention of the collateral discharges the security interest of the secured party and discharges any security interest or lien subordinate to the security interest of the secured party.
[C51, § 2071, 2072; R60, § 3649, 3650; C73, § 3307, 3308; C97, § 4273, 4274, 4285; C24, 27, 31, 35, 39, § 12352, 12353, 12370; C46, 50, 54, 58, 62, § 652.1, 652.2, 653.7; C66, 71, 73, 75, 77, 79, 81, § 554.9505]
Referred to in § 15E.91, 16.26, 16A.9, 537.5103, 554.9112, 554.9501, 554.9506
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