How exactly does the "clawback" in a PIA work?

[Barnerd]

Hi
If as part of a PIA I have unsecured debt wiped by the bank and e.g. subsequently sell my PPR in 10 years time, can the bank demand the extra equity realised in the sale? Even if there had been no debt written down on that particular property?

And do PIA's generally contain clauses addressing the clawback?

Thanks for any advice.

 

[Jim Stafford]

Section 103 of the Personal Insolvency Act 2012 incorporates a claw back provision in all PIAs.

The claw back only affects the debt secured on the property. By way of example, if a mortgage of €300,000 on a house valued at €200,000 is reduced to €200,000, and the house is sold in 5 years time for €250,000, then the claw back is €50,000.

Jim Stafford

 

[Futurelookin]

Section 103 of the Personal Insolvency Act 2012 incorporates a claw back provision in all PIAs.

The claw back only affects the debt secured on the property. By way of example, if a mortgage of €300,000 on a house valued at €200,000 is reduced to €200,000, and the house is sold in 5 years time for €250,000, then the claw back is €50,000.

Jim Stafford

Jim, does clawback only apply if the principal is written down on a property? If for e.g. a split mortgage is agreed, without write down, does the clawback apply?
Where it does apply, is it time limited to the 5 years, you specify in your reply?
Thanks

 

[Jim Stafford]

The claw back only applies to the mortgage which is written off. As a split mortgage does not involve a write down there is no claw back.

Provided the PIA does not specify otherwise, the claw back is the lesser of 20 years or the mortgage term itself.

Jim Stafford

 

[Barnerd]

Thanks Jim.