Section 6.47 Preservation of Interests for the Estate—11 U.S.C. § 551

• Library: Bankruptcy Practice (2007 Ed. + 2015 Cum Supp)

VII. (§6.47) Preservation of Interests for the Estate—11 U.S.C. § 551

“Any transfer avoided under section 522, 544, 545, 547, 548, 549, or 724(a) . . . is preserved for the benefit of the estate” as to property of the estate. 11 U.S.C. § 551. Section 551 ensures that an avoided transfer actually benefits the estate and not just a junior lienholder. Basically, at the commencement of the bankruptcy case, if there exists an unperfected lien or security interest, the trustee or debtor-in-possession can avoid...