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Co-Authored-By: Claude Opus 4.8 <noreply@anthropic.com>
2026-07-06 09:52:37 -04:00

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LegalText 11 U.S.C. § 551 Automatic preservation of avoided transfer us united_states_code code_section 11 BANKRUPTCY 5 CREDITORS, THE DEBTOR, AND THE ESTATE 551 11 U.S.C. § 551 current 119-100 2026-06-26 official https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc11@119-100.zip /us/usc/t11/s551 data/legal/raw/us/code/title-11/usc11.xml 640a9fda95bc69f956b99d724c0697fdf0cefd09c95be71844ec5ad36f5b0fcd 49b32bf784de01de21874d64b5d1d78d1d245352824a03caa6d6b941a4a2c9a2 b84d411c4fc740368f577ec9deedec85fc750c232c57057db726110696be91c1 2026-07-04 official
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11 U.S.C. § 551 - Automatic preservation of avoided transfer

Text

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. 95598, Nov. 6, 1978, 92 Stat. 2602.)

Notes

Historical and Revision Notes

legislative statementsSection 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. 95989This 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.