Lindsey v. Federal Land Bank of St. Louis

POSNER, Circuit Judge.

Section 506(a) of the Bankruptcy Code, 11 U.S.C. § 506(a), provides that “an allowed claim of a creditor secured by a lien on property in which the [bankrupt] estate has an interest... is a secured claim to the extent of the value of such creditor’s interest in the estate’s interest in such property,” and beyond that is an unsecured claim. Section 506(d) provides (with immaterial exceptions) that a lien which is not an allowed secured claim is void. The combined effect of these subsections is to “strip down” a *190lien to the value of the security. The question for decision…