Substitution of Collateral and Release Consent Form is a legal document designed to facilitate the substitution of a collateral security held by the Secured Party in guarantee of paying the debt. This form typically is used by the Owner to release and replace collateral security.
This template offers guidelines to initiate the process and it binding on the Secured party as well as on the Owner upon signing and executing. The Owner may keep, liquidate, or dispose the released collateral security upon the release by the Secured Party as per the free will and the Secured Party will not have any claims on the collateral security released using this Substitution of Collateral and Release Consent Form.
When using the Substitution of Collateral and Release Consent remember
- Mention the details of the promissory note initially executed to legalize the documentation in the Substitution of Collateral and Release Consent Form.
- Input of the previously held collateral security in detail is necessary.
- Mention the details of the new collateral security in the space provided.
- Notarization of Substitution of Collateral and Release Consent Form is not necessary; however, is recommended for its legal standing.
- Read the clauses and undertaking carefully before signing and executing the Substitution of Collateral and Release Consent Form.
- Keep one copy each of the duly completed document with both the parties.
Begin by entering the legal name of the Owner or the borrower in the space provided for the same. The next input for the legal name of the Secured Party or the lender has space reserved in the same line. Completing this foremost portion of the Substitution of Collateral and Release Consent Form is necessary in order to define the vested interests of both the parties.
Enter the date of the execution of the promissory note previously executed by the Owner and the Secured Party. Continue by typing the principal amount in the figure and words as necessary in the subsequent spaces provided for the same. Type the value in figure and words to denote the aggregate principal balance along with the accrued interest amount. Mention the date of the execution of the security agreement in the space reserved for the same. The space on the next lines needs input of the description of the collateral security held by the Secured Party towards the guarantee of the repayment.
Enter the description of the existing collateral security under the request for release along with the description of the new collateral security as a replacement for the former one in the next portion of the Substitution of Collateral and Release Consent Form.
Mention the name of the collateral security held by the Secured Party in the next portion. Continue by entering the name of the new collateral security in the space provided, followed by the date of the execution of the security agreement.
Type the date of the execution of the Substitution of Collateral and Release Consent Form followed by the signatures of the Owner and Secured Party to complete the form.
Text version of this Form
_____________________ (referred to as “OWNER”) and ______________________ (referred to as “SECURED PARTY”) agree as follows:
OWNER is indebted to SECURED PARTY pursuant to a note dated, ___________ , 20___ in the original principal amount of $_________ (___________________________ & _____/100 dollars); with a present total interest and principal balance of $_______ (___________________________ & _____/100 dollars), and a security agreement dated ___________ , 20___ and has pledged as security for the note the following: __________________
The DEBTOR has requested that SECURED PARTY release ____________________ as collateral for the obligation, but, that ________________________________ be pledged as new collateral for the obligation.
Accordingly, SECURED PARTY releases __________________________ as collateral for the obligation, and upon request of the DEBTOR shall execute such releases, UCC financing statement releases or other documents reasonably requested by the DEBTOR.
In all respects ________________________________ shall be subject to the terms and conditions of the security agreement between the parties dated ______________________. All other terms and conditions of the note and security agreement shall remain in full force and effect.
Dated: ___________ , 20___