source:
  type: regulation
  id: bankruptcy-11usc-506
  authority: Bankruptcy Code (11 U.S.C.) § 506 — Determination of secured status
  description: 'Bankruptcy Code (11 U.S.C.), §506 Determination of secured status. Captured section-complete from
    Cornell LII (verbatim).

    '
obligations:
- id: bankruptcy-11usc-506-a
  canonical_id: bankruptcy-11usc-506-a
  section: 11 U.S.C. §506(a)
  description: 'Determination of secured status — (a): (a) (1) An allowed claim of a creditor secured by a lien
    on property in which the estate has an interest, or that is subject to setoff under section 553 of this title
    , is a secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such
    property, or to the exte…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: Bankruptcy Code (11 U.S.C.) § 506
    source_class: usc-statute-lii
    source_url: https://www.law.cornell.edu/uscode/text/11/506
    snapshot_id: a4a1be8fbbf16580
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:6b0291609c13785aaa5e208da3db84a02d995f4da22c9683da7f2480afa56823
    paragraph_quote: (a) (1) An allowed claim of a creditor secured by a lien on property in which the estate has
      an interest, or that is subject to setoff under section 553 of this title , is a secured claim to the extent
      of the value of such creditor’s interest in the estate’s interest in such property, or to the extent of the
      amount subject to setoff, as the case may be, and is an unsecured claim to the extent that the value of such
      creditor’s interest or the amount so subject to setoff is less than the amount of such allowed claim. Such
      value shall be determined in light of the purpose of the valuation and of the proposed disposition or use
      of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such
      creditor’s interest. (2) If the debtor is an individual in a case under chapter 7 or 13, such value with respect
      to personal property securing an allowed claim shall be determined based on the replacement value of such
      property as of the date of the filing of the petition without deduction for costs of sale or marketing. With
      respect to property acquired for personal, family, or household purposes, replacement value shall mean the
      price a retail merchant would charge for property of that kind considering the age and condition of the property
      at the time value is determined.
    drafter_attestation: Verbatim slice of 11 U.S.C. §506 subsection (a) from Cornell LII snapshot a4a1be8fbbf16580;
      body isolated between nav and Editorial/Statutory Notes; substring-verified.
  judgment: false
- id: bankruptcy-11usc-506-b
  canonical_id: bankruptcy-11usc-506-b
  section: 11 U.S.C. §506(b)
  description: 'Determination of secured status — (b): (b) To the extent that an allowed secured claim is secured
    by property the value of which, after any recovery under subsection (c) of this section, is greater than the
    amount of such claim, there shall be allowed to the holder of such claim, interest on such claim, and any reasonable
    fees, costs, or…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: Bankruptcy Code (11 U.S.C.) § 506
    source_class: usc-statute-lii
    source_url: https://www.law.cornell.edu/uscode/text/11/506
    snapshot_id: a4a1be8fbbf16580
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:6b0291609c13785aaa5e208da3db84a02d995f4da22c9683da7f2480afa56823
    paragraph_quote: (b) To the extent that an allowed secured claim is secured by property the value of which,
      after any recovery under subsection (c) of this section, is greater than the amount of such claim, there shall
      be allowed to the holder of such claim, interest on such claim, and any reasonable fees, costs, or charges
      provided for under the agreement or State statute under which such claim arose.
    drafter_attestation: Verbatim slice of 11 U.S.C. §506 subsection (b) from Cornell LII snapshot a4a1be8fbbf16580;
      body isolated between nav and Editorial/Statutory Notes; substring-verified.
  judgment: false
- id: bankruptcy-11usc-506-c
  canonical_id: bankruptcy-11usc-506-c
  section: 11 U.S.C. §506(c)
  description: 'Determination of secured status — (c): (c) The trustee may recover from property securing an allowed
    secured claim the reasonable, necessary costs and expenses of preserving, or disposing of, such property to
    the extent of any benefit to the holder of such claim, including the payment of all ad valorem property taxes
    with respect to the …'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: Bankruptcy Code (11 U.S.C.) § 506
    source_class: usc-statute-lii
    source_url: https://www.law.cornell.edu/uscode/text/11/506
    snapshot_id: a4a1be8fbbf16580
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:6b0291609c13785aaa5e208da3db84a02d995f4da22c9683da7f2480afa56823
    paragraph_quote: (c) The trustee may recover from property securing an allowed secured claim the reasonable,
      necessary costs and expenses of preserving, or disposing of, such property to the extent of any benefit to
      the holder of such claim, including the payment of all ad valorem property taxes with respect to the property.
    drafter_attestation: Verbatim slice of 11 U.S.C. §506 subsection (c) from Cornell LII snapshot a4a1be8fbbf16580;
      body isolated between nav and Editorial/Statutory Notes; substring-verified.
  judgment: false
- id: bankruptcy-11usc-506-d
  canonical_id: bankruptcy-11usc-506-d
  section: 11 U.S.C. §506(d)
  description: 'Determination of secured status — (d): (d) To the extent that a lien secures a claim against the
    debtor that is not an allowed secured claim, such lien is void, unless— (1) such claim was disallowed only under
    section 502(b)(5) or 502(e) of this title; or (2) such claim is not an allowed secured claim due only to the
    failure of any entit…'
  type: do
  tags:
  - regulator-direct
  - gap-fill
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: Bankruptcy Code (11 U.S.C.) § 506
    source_class: usc-statute-lii
    source_url: https://www.law.cornell.edu/uscode/text/11/506
    snapshot_id: a4a1be8fbbf16580
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:6b0291609c13785aaa5e208da3db84a02d995f4da22c9683da7f2480afa56823
    paragraph_quote: '(d) To the extent that a lien secures a claim against the debtor that is not an allowed secured
      claim, such lien is void, unless— (1) such claim was disallowed only under section 502(b)(5) or 502(e) of
      this title; or (2) such claim is not an allowed secured claim due only to the failure of any entity to file
      a proof of such claim under section 501 of this title . ( Pub. L. 95–598 , Nov. 6, 1978 , 92 Stat. 2583 ;
      Pub. L. 98–353, title III, § 448 , July 10, 1984 , 98 Stat. 374 ; Pub. L. 109–8, title III, § 327 , title
      VII, § 712(d), Apr. 20, 2005 , 119 Stat. 99 , 128.) Historical and Revision Notes legislative statements Section
      506(a) of the House amendment adopts the provision contained in the Senate amendment and rejects a contrary
      provision as contained in H.R. 8200 as passed by the House. The provision contained in the Senate amendment
      and adopted by the House amendment recognizes that an amount subject to set-off is sufficient to recognize
      a secured status in the holder of such right. Additionally a determination of what portion of an allowed claim
      is secured and what portion is unsecured is binding only for the purpose for which the determination is made.
      Thus determinations for purposes of adequate protection is not binding for purposes of “cram down” on confirmation
      in a case under chapter 11. Section 506(b) of the House amendment adopts language contained in the Senate
      amendment and rejects language contained in H.R. 8200 as passed by the House. If the security agreement between
      the parties provides for attorneys’ fees, it will be enforceable under title 11, notwithstanding contrary
      law, and is recoverable from the collateral after any recovery under section 506(c). Section 506(c) of the
      House amendment was contained in H.R. 8200 as passed by the House and adopted, verbatim, in the Senate amendment.
      Any time the trustee or debtor in possession expends money to provide for the reasonable and necessary cost
      and expenses of preserving or disposing of a secured creditor’s collateral, the trustee or debtor in possession
      is entitled to recover such expenses from the secured party or from the property securing an allowed secured
      claim held by such party. Section 506(d) of the House amendment is derived from H.R. 8200 as passed by the
      House and is adopted in lieu of the alternative test provided in section 506(d) of the Senate amendment. For
      purposes of section 506(d) of the House amendment, the debtor is a party in interest. Determination of Secured
      Status: The House amendment deletes section 506(d)(3) of the Senate amendment, which insures that a tax lien
      securing a nondischargeable tax claim is not voided because a tax authority with notice or knowledge of the
      bankruptcy case fails to file a claim for the liability (as it may elect not to do, if it is clear there are
      insufficient assets to pay the liability). Since the House amendment retains section 506(d) of the House bill
      that a lien is not voided unless a party in interest has requested that the court determine and allow or disallow
      the claim, provision of the Senate amendment is not necessary. senate report no. 95–989 Subsection (a) of
      this section separates an undersecured creditor’s claim into two parts: He has a secured claim to the extent
      of the value of his collateral; and he has an unsecured claim for the balance of his claim. The subsection
      also provides for the valuation of claims which involve setoffs under section 553. While courts will have
      to determine value on a case-by-case basis, the subsection makes it clear that valuation is to be determined
      in light of the purpose of the valuation and the proposed disposition or use of the subject property. This
      determination shall be made in conjunction with any hearing on such disposition or use of property or on a
      plan affecting the creditor’s interest. To illustrate, a valuation early in the case in a proceeding under
      sections 361–363 would not be binding upon the debtor or creditor at the time of confirmation of the plan.
      Throughout the bill, references to secured claims are only to the claim determined to be secured under this
      subsection, and not to the full amount of the creditor’s claim. This provision abolishes the use of the terms
      “secured creditor” and “unsecured creditor” and substitutes in their places the terms “secured claim” and
      “unsecured claim.” Subsection (b) codifies current law by entitling a creditor with an oversecured claim to
      any reasonable fees (including attorney’s fees), costs, or charges provided under the agreement under which
      the claim arose. These fees, costs, and charges are secured claims to the extent that the value of the collateral
      exceeds the amount of the underlying claim. Subsection (c) also codifies current law by permitting the trustee
      to recover from property the value of which is greater than the sum of the claims secured by a lien on that
      property the reasonable, necessary costs and expenses of preserving, or disposing of, the property. The recovery
      is limited to the extent of any benefit to the holder of such claim. Subsection (d) provides that to the extent
      a secured claim is not allowed, its lien is void unless the holder had neither actual notice nor knowledge
      of the case, the lien was not listed by the debtor in a chapter 9 or 11 case or such claim was disallowed
      only under section 502(e). house report no. 95–595 Subsection (d) permits liens to pass through the bankruptcy
      case unaffected. However, if a party in interest requests the court to determine and allow or disallow the
      claim secured by the lien under section 502 and the claim is not allowed, then the lien is void to the extent
      that the claim is not allowed. The voiding provision does not apply to claims disallowed only under section
      502(e), which requires disallowance of certain claims against the debtor by a codebtor, surety, or guarantor
      for contribution or reimbursement.'
    drafter_attestation: Verbatim slice of 11 U.S.C. §506 subsection (d) from Cornell LII snapshot a4a1be8fbbf16580;
      body isolated between nav and Editorial/Statutory Notes; substring-verified.
  judgment: false
