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Refinancing triggers “clawback” payment to secured creditor based on property’s market value
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High Court rules that the "clawback" provision under personal insolvency legislation is triggered by the refinancing of a mortgage, with the clawback amount calculated based on the property's market value at the time of refinancing, rather than the amount borrowed. The court found that the objective or market value of the property, rather than the transaction price or refinancing amount, is relevant for determining the clawback payment. This decision upholds the statutory protection for secured creditors, ensuring they benefit from any increase in property value within the specified period after a personal insolvency arrangement (PIA) has been implemented.
Personal Insolvency Act 2012, clawback provision, refinancing, mortgage, market value, secured creditor, debt restructuring, principal private residence, negative equity, Personal Insolvency Arrangement (PIA), statutory protection, secured debt, unsecured debt, property disposition, valuation, High Court, debt write-down, insolvency.
Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.
