(1) According to this paragraph, when a person's property is confiscated, the debt to be paid or the obligation to be fulfilled by such person shall be deducted from the property of such person based on the following order of priority:-
(a) Expenses incurred in taking action related to marriage,
(b) to the extent that the liability of the secured creditor to the mortgagee is held by such mortgagee,
(c) Taxes, fines or other government levies payable to the Government of Nepal, the State Government or the local level and the remaining amount; (d) Claims of other claimants other than those mentioned in clause (b), (c) or (d).
(2) When paying or disbursing a debt or liability in accordance with sub-section (1), if there is more than one creditor or claimant in the same order of priority, the debt or claim shall be disbursed at a proportional rate from the equity of each creditor or claimant in proportion to the debt or claim amount.
(3) According to clause (b) of sub-section (1), after the debt has been recovered from the mortgaged property, if any part or amount of such mortgage remains, other creditors or claimants may claim such part or amount. But if the secured creditor's debt cannot be fully recovered from such assets, he cannot claim other assets.