960
Opinion of the Court
II
The Code provision central to the resolution of this case is § 506(a), which states:
"An allowed claim of a creditor secured by a lien on property in which the 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 is an unsecured claim to the extent that the value of such creditor's interest . . . is less than the amount of such allowed claim. Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property . . . ." 11 U. S. C. § 506(a).
Over ACC's objection, the Rashes' repayment plan proposed, pursuant to § 1325(a)(5)(B), continued use of the property in question, i. e., the truck, in the debtor's trade or business. In such a "cram down" case, we hold, the value of the property (and thus the amount of the secured claim under § 506(a)) is the price a willing buyer in the debtor's trade, business, or situation would pay to obtain like property from a willing seller.
Rejecting this replacement-value standard, and selecting instead the typically lower foreclosure-value standard, the Fifth Circuit trained its attention on the first sentence of § 506(a). In particular, the Fifth Circuit relied on these first sentence words: A claim is secured "to the extent of the value of such creditor's interest in the estate's interest in such property." See 90 F. 3d, at 1044 (emphasis added) (citing § 506(a)). The Fifth Circuit read this phrase to instruct that the "starting point for the valuation [is] what the creditor could realize if it sold the estate's interest in the property according to the security agreement," namely, through "re-possess[ing] and sell[ing] the collateral." Ibid.
We do not find in the § 506(a) first sentence words—"the creditor's interest in the estate's interest in such property"—
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