| Commentary

163 Extortionate credit transactions

| Commentary

163 Extortionate credit transactions

The provisions on extortionate credit transactions in Section 244 of the Insolvency Act 1986 apply where the company has entered administration or has gone into liquidation, and has within the preceding three years entered into an extortionate credit transaction1. A credit transaction is extortionate if, having regard to the risk accepted by the creditor, the terms are or were such as to require grossly exorbitant payments to be made in respect of the provision of the credit (whether unconditionally or in certain contingencies) or it otherwise grossly contravened ordinary principles of fair dealing2

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