Payment of a secured claim is upon the basis of the amount allowed if the creditor surrenders the creditor's security; otherwise payment is upon the basis of one of the following:
1. Security exhausted. If the creditor exhausts the creditor's security before receiving payment, unless precluded by other law, upon the amount of the claim allowed less the fair value of the security; or
2. Security not exhausted. If the creditor does not have the right to exhaust the creditor's 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.