Code of Alabama
Ala. Code § 7-9-505 (2026)
Compulsory Disposition of Collateral; Acceptance of the Collateral as Discharge of Obligation.
✓ official Alabama Legislature (ALISON) text, current July 2026
Repealed by Act 2001-481, p. 647, § 4, effective January 1, 2002.
(Acts 1965, No. 549, p. 811; Acts 1981, No. 81-312, p. 399.)
Notes of Decisions
Cited in 11
cases, 1978–2000 · leading case: Bischoff v. Thomasson, 400 So. 2d 359 (Ala. 1981).
Bischoff v. Thomasson, 400 So. 2d 359 (Ala. 1981). “Code 1975, § 7-9-505 (2). Thomasson has since dropped his theory of buyer in the ordinary course of business on this appeal, and now claims he is protected as a creditor of a consignee pursuant to Code 1975, § 7-2-326 (2).”
Charles R. Hall Motors, Inc. v. Lewis, 137 F.3d 1280 (11th Cir. 1998). “See Ala.Code § 7-9-505(1) (referencing the law of conversion in discussing secured creditors’ duties to dispose timely the repossessed personalty).”
Greene v. Assocs. (In Re Green), 248 B.R. 583 (Bankr. N.D. Ala. 2000). “What this subsection of Alabama’s Uniform Commercial Code provides is that the secured party’s disposition of collateral after default by a debtor is the event which cuts off the debtor’s rights and interests in the collateral! It is not until after a disposition under § 7-9-504…”
Draughon v. Gen. Fin. Credit Corp., 362 So. 2d 880 (Ala. 1978). “— At any time before the secured party has disposed of collateral or entered into a contract for its disposition under section 7-9-504 or before the obligation has been discharged under section 7-9-505 (2) the debtor or any other secured party may unless otherwise agreed in…”
Turner v. DeKalb Bank (In Re Turner), 209 B.R. 558 (Bankr. N.D. Ala. 1997). “Code § 7-9-504), proper conduct of the sale ( Ala. Code § 7-9-505 ), and the surplus from sale proceeds (Ala.”
Mattheiss v. Title Loan Express (In Re Mattheiss), 214 B.R. 20 (Bankr. N.D. Ala. 1997). “At any time before the secured party has disposed of collateral or entered into a contract for its disposition under Section 7-9-504 or before,the obligation has been discharged under subsection (2) of Section 7-9-505 the debt- or or any other secured party may unless otherwise…”
In Re Powell, 223 B.R. 225 (Bankr. N.D. Ala. 1998). “That section provides: At any time before the secured party has disposed of collateral or entered into a contract for its disposition under Section 7-9-504 or before the obligation has been discharged under subsection (2) of Section 7-9-505 the debtor or any other secured party…”
Warren v. SouthTrust Bank, NA (In Re Warren), 221 B.R. 843 (Bankr. N.D. Ala. 1998). “That section provides: At any time before the secured party has disposed of collateral or entered into a contract for its disposition under Section 7-9-504 or before the obligation has been discharged under Section 7-9-505(2) the debtor or any other secured party may unless…”
Charles R. Hall Motors v. Lewis, 137 F.3d 1280 (11th Cir. 1998). “Code § 7-9-504 ] or before the obligation has been discharged under [ Ala. Code § 7-9-505 (2)] the debtor or any other secured 8 redemption interest under state law was sufficient to render the automobile “property of the estate” under federal law.”
Cobb v. Gen. Motors Acceptance Corp., 589 So. 2d 728 (Ala. Civ. App. 1991). “GMAC cites § 7-9-505, Code 1975, which provides: "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.”
Hope v. Performance Auto., Inc., 710 So. 2d 1235 (Ala. 1998). “A “transfer in settlement” may have referred to a secured party’s election to accept collateral in discharge of a secured obligation under § 7-9-505(2). A “transfer in realization” logically referred to a transfer by a secured party, in foreclosure of a security interest under §…”
— Ala. Code § 7-9-505(1) — 2 cases
Greene v. Assocs. (In Re Green), 248 B.R. 583 (Bankr. N.D. Ala. 2000). “What this subsection of Alabama’s Uniform Commercial Code provides is that the secured party’s disposition of collateral after default by a debtor is the event which cuts off the debtor’s rights and interests in the collateral! It is not until after a disposition under § 7-9-504…”
Charles R. Hall Motors, Inc. v. Lewis, 137 F.3d 1280 (11th Cir. 1998). “See Ala.Code § 7-9-505(1) (referencing the law of conversion in discussing secured creditors’ duties to dispose timely the repossessed personalty).”
— Ala. Code § 7-9-505(2) — 5 cases
Charles R. Hall Motors, Inc. v. Lewis, 137 F.3d 1280 (11th Cir. 1998). “See Ala.Code § 7-9-505(1) (referencing the law of conversion in discussing secured creditors’ duties to dispose timely the repossessed personalty).”
Greene v. Assocs. (In Re Green), 248 B.R. 583 (Bankr. N.D. Ala. 2000). “What this subsection of Alabama’s Uniform Commercial Code provides is that the secured party’s disposition of collateral after default by a debtor is the event which cuts off the debtor’s rights and interests in the collateral! It is not until after a disposition under § 7-9-504…”
Warren v. SouthTrust Bank, NA (In Re Warren), 221 B.R. 843 (Bankr. N.D. Ala. 1998). “That section provides: At any time before the secured party has disposed of collateral or entered into a contract for its disposition under Section 7-9-504 or before the obligation has been discharged under Section 7-9-505(2) the debtor or any other secured party may unless…”
Cobb v. Gen. Motors Acceptance Corp., 589 So. 2d 728 (Ala. Civ. App. 1991). “GMAC cites § 7-9-505, Code 1975, which provides: "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.”
Hope v. Performance Auto., Inc., 710 So. 2d 1235 (Ala. 1998). “A “transfer in settlement” may have referred to a secured party’s election to accept collateral in discharge of a secured obligation under § 7-9-505(2). A “transfer in realization” logically referred to a transfer by a secured party, in foreclosure of a security interest under §…”
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