11 U.S.C. § 724 : US Code - Section 724: Treatment of certain liens

Search 11 U.S.C. § 724 : US Code - Section 724: Treatment of certain liens

(a) The trustee may avoid a lien that secures a claim of a kind
specified in section 726(a)(4) of this title.
(b) Property in which the estate has an interest and that is
subject to a lien that is not avoidable under this title (other
than to the extent that there is a properly perfected unavoidable
tax lien arising in connection with an ad valorem tax on real or
personal property of the estate) and that secures an allowed claim
for a tax, or proceeds of such property, shall be distributed -
(1) first, to any holder of an allowed claim secured by a lien
on such property that is not avoidable under this title and that
is senior to such tax lien;
(2) second, to any holder of a claim of a kind specified in
section 507(a)(1) (except that such expenses, other than claims
for wages, salaries, or commissions that arise after the date of
the filing of the petition, shall be limited to expenses incurred
under chapter 7 of this title and shall not include expenses
incurred under chapter 11 of this title), 507(a)(2), 507(a)(3),
507(a)(4), 507(a)(5), 507(a)(6), or 507(a)(7) of this title, to
the extent of the amount of such allowed tax claim that is
secured by such tax lien;
(3) third, to the holder of such tax lien, to any extent that
such holder's allowed tax claim that is secured by such tax lien
exceeds any amount distributed under paragraph (2) of this
subsection;
(4) fourth, to any holder of an allowed claim secured by a lien
on such property that is not avoidable under this title and that
is junior to such tax lien;
(5) fifth, to the holder of such tax lien, to the extent that
such holder's allowed claim secured by such tax lien is not paid
under paragraph (3) of this subsection; and
(6) sixth, to the estate.
(c) If more than one holder of a claim is entitled to
distribution under a particular paragraph of subsection (b) of this
section, distribution to such holders under such paragraph shall be
in the same order as distribution to such holders would have been
other than under this section.
(d) A statutory lien the priority of which is determined in the
same manner as the priority of a tax lien under section 6323 of the
Internal Revenue Code of 1986 shall be treated under subsection (b)
of this section the same as if such lien were a tax lien.
(e) Before subordinating a tax lien on real or personal property
of the estate, the trustee shall -
(1) exhaust the unencumbered assets of the estate; and
(2) in a manner consistent with section 506(c), recover from
property securing an allowed secured claim the reasonable,
necessary costs and expenses of preserving or disposing of such
property.
(f) Notwithstanding the exclusion of ad valorem tax liens under
this section and subject to the requirements of subsection (e), the
following may be paid from property of the estate which secures a
tax lien, or the proceeds of such property:
(1) Claims for wages, salaries, and commissions that are
entitled to priority under section 507(a)(4).
(2) Claims for contributions to an employee benefit plan
entitled to priority under section 507(a)(5).