Bankruptcy Code

Bankruptcy is a legal declaration that allows some debtors to discharge their unsecured debts. The text of this statute is provided as general information to the public. It may be amended, revised, or rescinded at any time without notice. This information is not intended to be legal advice. For more information, please see our disclaimer.

11 U.S.C. § 1205. Adequate protection

(a) Section 361 [11 USCS § 361] does not apply in a case under this chapter [11 USCS §§ 1201 et seq.].

(b) In a case under this chapter [11 USCS §§ 1201 et seq.], when adequate protection is required under section 362, 363, or 364 of this title [11 USCS § 362, 363, or 364] of an interest of an entity in property, such adequate protection may be provided by--
(1) requiring the trustee to make a cash payment or periodic cash payments to such entity, to the extent that the stay under section 362 of this title [11 USCS § 362], use, sale, or lease under section 363 of this title [11 USCS § 363], or any grant of a lien under section 364 of this title [11 USCS § 364] results in a decrease in the value of property securing a claim or of an entity's ownership interest in property;
(2) providing to such entity an additional or replacement lien to the extent that such stay, use, sale, lease, or grant results in a decrease in the value of property securing a claim or of an entity's ownership interest in property;
(3) paying to such entity for the use of farmland the reasonable rent customary in the community where the property is located, based upon the rental value, net income, and earning capacity of the property; or
(4) granting such other relief, other than entitling such entity to compensation allowable under section 503(b)(1) of this title [11 USCS § 503(b)(1)] as an administrative expense, as will adequately protect the value of property securing a claim or of such entity's ownership interest in property.