FUNDAMENTALS OF BANKRUPTCY FOR LENDERS
General Principles of Bankruptcy Law
2. Secured Claims
a. A secured creditor is secured only to the extent of the value of its collateral. A $250,000 loan secured by a $200,000 bulldozer is really a $200,000 secured claim and a $50,000 unsecured claim.
b. The Court is empowered to determine both the amount of a creditor’s claim and the value of the collateral securing the claim.
c. BAPCPA provides that in Chapter 7 and 13 consumer cases, the value of personal property purchased for personal, family or household purposes shall be the price a retail merchant would charge for property of that kind, considering its age and condition. In such cases value is determined as of the date of filing the Bankruptcy.
For additional information on any aspect of BAPCPA, please contact Spotts Fain attorneys, Robert H. Chappell, III or Jennifer J. West.
