Secured creditor’s options in relation to property that is subject to a charge

(1) If the property of a bankrupt is subject to a charge, the creditor who holds the charge may choose an option specified in subsection (2).
(2) The options are as follows—
(a) Option 1: to realise the property by having it sold (but only if the creditor is entitled to do so under the terms of the charge); or
(b) Option 2: to have the property valued and prove in the bankruptcy as an unsecured creditor for the balance due (if any) after deducting the amount of the valuation;
(c) Option 3: to surrender the charge to the bankruptcy trustee for the general benefit of the creditors and prove in the bankruptcy as an unsecured creditor for the whole debt.
(3) The bankruptcy trustee may, at any time by notice, require a creditor who holds a charge over a bankrupt's property—
(a) within thirty days after receipt of the notice, to choose one of the options specified in subsection (2); and
(b) if the creditor chooses option 2 or option 3, to exercise the chosen option within that period.
(4) A creditor who, having been served with a notice under subsection (1), fails to comply with the notice is taken to have surrendered the charge to the bankruptcy trustee under option 3 for the general benefit of the creditors, in which case the creditor may prove as an unsecured creditor for the whole debt.
(5) This section is subject to section 227.