CHAPTER 5CREDITORS, THE DEBTOR, AND THE ESTATE
Sub Chapter III The Estate
Sec. 545. Statutory liens
The trustee may avoid the fixing of a statutory lien on property of
the debtor to the extent that such lien--
(1) first becomes effective against the debtor--
(A) when a case under this title concerning the debtor is
(B) when an insolvency proceeding other than under this
title concerning the debtor is commenced;
(C) when a custodian is appointed or authorized to take or
(D) when the debtor becomes insolvent;
(E) when the debtor's financial condition fails to meet a
specified standard; or
(F) at the time of an execution against property of the
debtor levied at the instance of an entity other than the holder
of such statutory lien;
(2) is not perfected or enforceable at the time of the
commencement of the case against a bona fide purchaser that
purchases such property at the time of the commencement of the case,
whether or not such a purchaser exists;
(3) is for rent; or
(4) is a lien of distress for rent.
(Pub. L. 95-598, Nov. 6, 1978, 92 Stat. 2597; Pub. L. 98-353, title III,
Sec. 460, July 10, 1984, 98 Stat. 377.)
Historical and Revision Notes
Section 545 of the House amendment modifies similar provisions
contained in the House bill and Senate amendment to make clear that a
statutory lien may be avoided under section 545 only to the extent the
lien violates the perfection standards of section 545. Thus a Federal
tax lien is invalid under section 545(2) with respect to property
specified in sections 6323(b) and (c) of the Internal Revenue Code of
1954 [title 26]. As a result of this modification, section 545(b) of the
Senate amendment is deleted as unnecessary.
Statutory liens: The House amendment retains the provision of
section 545(2) of the House bill giving the trustee in a bankruptcy case
the same power which a bona fide purchaser has to take over certain
kinds of personal property despite the existence of a tax lien covering
that property. The amendment thus retains present law, and deletes
section 545(b) of the Senate amendment which would have no longer
allowed the trustee to step into the shoes of a bona fide purchaser for
senate report no. 95-989
This section permits the trustee to avoid the fixing of certain
statutory liens. It is derived from subsections 67b and 67c of present
law [section 107(b) and (c) of former title 11]. Liens that first become
effective on the bankruptcy or insolvency of the debtor are voidable by
the trustee. Liens that are not perfected or enforceable on the date of
the petition against a bona fide purchaser are voidable. If a transferee
is able to perfect under section 546(a) and that perfection relates back
to an earlier date, then in spite of the filing of the bankruptcy
petition, the trustee would not be able to defeat the lien, because the
lien would be perfected and enforceable against a bona fide purchaser
that purchased the property on the date of the filing of the petition.
Finally, a lien for rent or of distress for rent is voidable, whether
the lien is a statutory lien or a common law lien of distress for rent.
See proposed 11 U.S.C. 101(37); Bankruptcy Act Sec. 67(c)(1)(C). The
trustee may avoid a lien under this section even if the lien has been
enforced by sale before the commencement of the case. To that extent,
Bankruptcy Act Sec. 67c(5) is not followed.
Subsection (b) limits the trustee's power to avoid tax liens under
Federal, state, or local law. For example, under Sec. 6323 of the
Internal Revenue Code [Title 26]. Once public notice of a tax lien has
been filed, the Government is generally entitled to priority over
subsequent lienholders. However, certain purchasers who acquire an
interest in certain specific kinds of personal property will take free
of an existing filed tax lien attaching to such property. Among the
specific kinds of personal property which a purchaser can acquire free
of an existing tax lien (unless the buyer knows of the existence of the
lien) are stocks and securities, motor vehicles, inventory, and certain
household goods. Under the present Bankruptcy Act (Sec. 67(c)(1))
[section 107(c)(1) of former title 11], the trustee may be viewed as a
bona fide purchaser, so that he can take over any such designated items
free of tax liens even if the tax authority has perfected its lien.
However, the reasons for enabling a bona fide purchaser to take these
kinds of assets free of an unfiled tax lien, that is, to encourage free
movement of these assets in general commerce, do not apply to a trustee
in a title 11 case, who is not in the same position as an ordinary bona
fide purchaser as to such property. The bill accordingly adds a new
subsection (b) to sec. 545 providing, in effect, that a trustee in
bankruptcy does not have the right under this section to take otherwise
specially treated items of personal property free of a tax lien filed
before the filing of the petition.
1984--Par. (1)(A). Pub. L. 98-353, Sec. 460(1), struck out ``is''
Par. (1)(C). Pub. L. 98-353, Sec. 460(2), substituted ``appointed or
authorized to take'' for ``apponted''.
Par. (2). Pub. L. 98-353, Sec. 460(3), substituted ``at the time of
the commencement of the case'' for ``on the date of the filing of the
petition'' in two places.
Effective Date of 1984 Amendment
Amendment by Pub. L. 98-353 effective with respect to cases filed 90
days after July 10, 1984, see section 552(a) of Pub. L. 98-353, set out
as a note under section 101 of this title.
Section Referred to in Other Sections
This section is referred to in sections 106, 303, 349, 502, 522,
546, 547, 548, 550, 551, 552, 749, 764, 901, 926 of this title; title 26
sections 6327, 7437.