Statute · New York Uniform Commercial Code

N.Y. U.C.C. Law § 9-205 — Use or Disposition of Collateral Permissible

N.Y. U.C.C. Law § 9-205

Type: Statute
Source: New York Uniform Commercial Code
Jurisdiction: New York
Current through: Nov 5, 2026 (NY Senate Open Legislation)

Section 9--205. Use or Disposition of Collateral Permissible.

Citator

N.Y. U.C.C. Law § 9-205 — Use or Disposition of Collateral Permissible is in force in the current edition of the Code, and nothing recorded condemns it.

Section 9--205. Use or Disposition of Collateral Permissible.

(a) When security interest not invalid or fraudulent. A security interest is not invalid or fraudulent against creditors solely because:

(1) the debtor has the right or ability to:

(A) use, commingle, or dispose of all or part of the

collateral, including returned or repossessed goods;

(B) collect, compromise, enforce, or otherwise deal with

collateral;

(D) use, commingle, or dispose of proceeds; or

(2) the secured party fails to require the debtor to account for

proceeds or replace collateral.

(b) Requirements of possession not relaxed. This section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.