I'd try the Cactus & Succulent forum for better information.

What I would do is chop the plant right below the bend. It will grow an offset, so don't throw it away. Let the piece you cut off dry for a couple weeks before rooting it in a well drainig soil. Depending on the length of the top part, it might be wise to cut it into a couple pieces and root them that way.

Don't cut it. You probably have a trunking aloe, or a "climbing" aloe (more like rambling). From personal experience I know Aloe Thraskii, Marlothii, Ferox and Arboresence start off with small leaves, then begin to trunk and become top heavy. Since they are outside in the ground, the trunk developed enough to support the top. Yours, being inside, might have problems doing that. The bottom leaves shriveling is natural for trunking aloes. They lose their bottom leaves once they get too old. Like I said, don't cut it, unless you are SURE your aloe produces suckers. There are many Trunking Aloes that will not produce suckers, and cutting it will definately kill it.

I am assuming that you just have the old fashion, regular, common aloe plant. If that is the case then what Mentha th said is OK to do. I would only add that you really don't need to callous the ends of for a couple of weeks. Rule of thumb with cacti and succulents as far as callousing is one week for each inch in diameter of the cut. I would assume that the cut is no more than 1/2 inch in diameter therefore I would let it sit for four days or so.

Larry