§ 9401 Debtor Collateral Transfer Rules

• •If you owe money and have something valuable (like a car) as security, you can usually sell or give it away unless there’s a special rule.
• •Even if your contract says you can’t sell or give away that valuable thing, selling it still happens—you just might get in trouble for breaking the contract.
• •Some special cases (like in other sections of the law) might change these rules.

You borrow money from a bank to buy a car, and the car is the security for the loan.

If your contract with the bank says you can’t sell the car, but you sell it anyway, the sale still happens. However, the bank can say you broke the contract and might ask you to pay the loan back early.