11-U.S.C.-551
§551 – Automatic Preservation of Avoided Transfer
Pathway
Title 11 > Chapter 5 > Subchapter III > Section 551
Details
- Reference: Section 551
- Legend: §551 – Automatic Preservation of Avoided Transfer
- USCode Year: 2013
Provision Content
Any transfer avoided under section 522, 544, 545, 547, 548, 549, or 724(a) of this title, or any lien void under section 506(d) of this title, is preserved for the benefit of the estate but only with respect to property of the estate.
(Pub. L. 95–598, Nov. 6, 1978, 92 Stat. 2602.)
Historical and Revision Notes
legislative statements
Section 551 is adopted from the House bill and the alternative in the Senate amendment is rejected. The section is clarified to indicate that a transfer avoided or a lien that is void is preserved for the benefit of the estate, but only with respect to property of the estate. This prevents the trustee from asserting an avoided tax lien against after acquired property of the debtor.
senate report no. 95–989
This section is a change from present law. It specifies that any avoided transfer is automatically preserved for the benefit of the estate. Under current law, the court must determine whether or not the transfer should be preserved. The operation of the section is automatic, unlike current law, even though preservation may not benefit the estate in every instance. A preserved lien may be abandoned by the trustee under proposed 11 U.S.C. 554 if the preservation does not benefit the estate. The section as a whole prevents junior lienors from improving their position at the expense of the estate when a senior lien is avoided.
U.S. Encyclopedia of Law Coverage
11-U.S.C.-510 in the Legal Encyclopedia: Bankruptcy
In this entry about 11-U.S.C.-510, find legal reference material, bibliographies and premiere content related to bankruptcy in the American Encyclopedia of Law, presenting a comprehensive view of the United States bankruptcy-specific issues, written by authorities in the field.
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