HRS §490:9-622
Effect of accepting collateral
Read the official text at capitol.hawaii.gov ↗When a lender takes collateral to settle a debt, the debt is reduced or paid off as agreed, and the lender gets the borrower's rights to that collateral. Any lower-priority claims on the collateral end, even if the lender made a mistake in the process.
creditorsdebtors
The statute, as written — Effect of acceptance of collateral
A copy, taken August 20, 2026. The version published by the Legislature is the one that governs, and it may have changed since. Check it before relying on anything here.
(a) 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) A subordinate interest is discharged or terminated under subsection (a), even if the secured party fails to comply with this article.
LawTrove is not legal advice. The summary above is a computer-generated restatement — the authoritative text is the official version linked above.