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Consequently, when the secured obligation becomes payable, the lender may requestthat a judge authorize the sale of the pledged goods or instruments and the proceeds of thesale must be preserved as a security interest by the lender, in lieu of the goods or instrumentssold.Also, the lender may sell the pledged goods when their value declines to the point thatthey will be insufficient to cover the debt plus an additional 20 percent thereof, or whenthe debtor fails to provide in a timely manner the necessary funds to cover the installmentpayments that must be made on the pledged instruments.This, because the pledgee, in addition to being obligated to protect and conserve thepledged goods or instruments, must exercise all the rights intrinsic to them. The debtoris responsible for the relevant expenses, and therefore if the debtor fails to cover saidexpenses in a timely manner, the goods or instruments can be sold.3.2. Non-possessory Pledge or Registered Pledge3.2.1. CharacteristicsThis pledge is based on fixed-asset loans, working capital loans, or on accounts receivablethat are not conveyed to the pledgee, but rather remain in the power of the party grantingthe guarantee, who is considered a legal depository of the assets or instruments offered as aguarantee, as well as all other cases provided in the General Law of Negotiable Instrumentsand Credit Operations (Ley General de Títulos y Operaciones de Crédito, LGTYOC) in whichparties seek to secure an obligation and preference in payment relative to other lenders,where the debtor remains in material possession of the pledged goods. In exceptionalcases, the parties can agree that the lender or a third party take possession of such goods.This type of special pledge can be used to secure any obligation regardless of thedebtor’s principal activity, including future obligations. However, in this case the guaranteecan only be foreclosed when the underlying obligation is due and payable.It is worth mentioning that the amount of the guarantee can be an amount determinedat the time the guarantee is granted or at the time of its foreclosure. The guarantee mustbe recorded in the registry, even when the maximum amount guaranteed has not beendetermined.Along with the above, the guarantee includes, unless otherwise agreed, the ordinaryand past due interest and penalties stipulated in the respective contract and the costsincurred in the process of foreclosing on the pledge.195Financing Guarantees3.2.2. Material object of the non-possessory pledgeAll types of rights and moveable goods can be the material object of the non-possessory pledge.These rights or goods must be identified, unless all of the debtor’s goods used in carryingout its primary activity are being pledged, in which case a generic description will suffice.