§ 15-12-809 — Secured claims

(1) Payment of a secured claim is upon the basis
of the amount allowed if the creditor surrenders his security; otherwise payment is
upon the basis of one of the following:

(a) If the creditor exhausts his security before receiving payment, (unless
precluded by other law) upon the amount of the claim allowed less the fair value of
the security; or

(b) If the creditor does not have the right to exhaust his security or has not
done so, upon the amount of the claim allowed less the value of the security
determined by converting it into money according to the terms of the agreement
pursuant to which the security was delivered to the creditor, or by the creditor and
personal representative by agreement, arbitration, compromise, or litigation.

(2) A claim for a decedent's proportionate share of liability for a secured
debt, made by a third party who is jointly liable with the decedent to the secured
creditor, based on the third party's right to contribution from the decedent, shall be
reduced by the fair market value, as of the date of death, of the decedent's interest
in the property securing the debt, if the property securing the debt is owned by the
decedent and not subject to disposition by will or intestate succession at the time
of death, and if the decedent's interest passed to the third party on decedent's
death.

Legislative History

Source: L. 73: R&RE, p. 1595, � 1. C.R.S. 1963: � 153-3-809. L. 91: Entire section amended, p. 1449, � 11, effective July 1.