Prepayment Premiums and Make-Whole Payments

To determine whether a creditor has an enforceable right to collect a prepayment premium in bankruptcy, courts first consider the text of the loan documents.

31 minute read December 23, 2013 at 04:04 PM

Joel H. Levitin

Prepayment Premiums and Make-Whole Payments

Many loan agreements include clauses that permit borrowers to repay debt prior to the maturity date only if they make additional payments that are typically referred to as “prepayment premiums” or “make-whole payments.”

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