Lien or encumbrance on property sold
Sec. 13. (a) A part of the property assigned on which there are
liens or encumbrances may be sold by the trustee subject to the liens
or encumbrances.
(b) However, if the trustee is satisfied that the general fund would
be materially increased by the payment of the liens or encumbrances,
the trustee shall make application, by petition, to the judge of the
circuit court for an order to pay the liens and encumbrances before
selling the property. Before the holder of any lien or encumbrance is
entitled to receive any part of the holder's debt from the general fund,
the holder shall proceed to enforce the payment of the debt by sale,
or otherwise, of the property on which the lien or encumbrance
exists. For the residue of the claim, the holder of the lien or
encumbrance shall share pro rata with the other creditors, if entitled
to do so under Indiana law.
As added by P.L.2-2002, SEC.3.
Last modified: May 24, 2006