Courts

Widow has €3.5m debt written off and gets to keep family home under court-approved arrangement

Woman (67) gets to keep €850,000 family home under restructured mortgage arrangement

At the High Court, Mr Justice Alexander Owens said It seemed reasonably certain the debtor would be able to comply with terms of the personal insolvency arrangement. Photograph: Chris Maddaloni/Collins

Mary Carolan
Mon May 13 2024 - 15:12

A widowed company director has had more than €3.5 million unsecured debt written off under a personal insolvency arrangement (PIA) approved by the High Court.

Mr Justice Alexander Owens approved the arrangement on Monday in the case of Gill McEvoy (67), Larchfield Road, Goatstown, Dublin 14.

It concerned total debt of some €4.26 million, the vast bulk owed to Pepper Finance Corporation Ireland DAC.

Some €3.55 million of Pepper’s debt is unsecured debt related to leftover debt after the sale of investment property; €706,629 is outstanding on a mortgage loan on the family home at Goatstown, with a market value of about €850,000, and €3,781 is owed to the Revenue Commissioners.

READ MORE

Keith Farry, for Eugene McDarby, Ms McEvoy’s personal insolvency practitioner (PIP), instructed by Nicola Nevin & Co Solicitors, said she is recently widowed. Her assets comprised the family home, a one-seventh share held by her late husband in a property in Galway, and a car valued at €12,000, he outlined.

As a director of Wildan Sports Ltd, she receives €4,650 monthly in director’s fees and, after deduction of set monthly and other costs, was in a position to make a total contribution of €43,577 to creditors over the six-year term of the PIA.

Ms McEvoy’s inheritance of her late husband’s one-seventh share in the Galway property is excluded from consideration because she would be unable to sell it due to clauses in her mother-in-law’s will.

Under the PIA, the mortgage on Ms McEvoy’s home will be restructured on terms including an extension of the mortgage accounts to 288 months, when she will be aged 91. The rate on the mortgage accounts will be reduced to 3 per cent for the first 24 months and fixed payments of €1,764 monthly will apply, after which monthly repayments of €2,649 will apply until month 72 at the ECB rate. Interest-only monthly repayments of €2,649 monthly will apply for the remainder of the mortgage terms.

The valuation of €850,000 is agreed and any outstanding balance on the mortgage on maturity of the loan, or after the death of the debtor, whichever occurs first, will be paid from sale of the property.

At the close of the six-year arrangement, total repayments to unsecured creditors are projected at €27,803, net of the PIP’s fees of almost €12,000, plus outlays such as bank and legal fees.

Mr Farry said Pepper and the Revenue Commissioners had supported the proposed PIA in relation to treatment of secured debt but Pepper opposed the proposal concerning the treatment of unsecured debt. The PIA met the relevant criteria for approval under the Personal Insolvency Act, including that it gives a better return for creditors than under bankruptcy, he submitted.

Mr Justice Owens said it appeared the PIA would enable the debtor to resolve her indebtedness without recourse to bankruptcy and enable her creditors to address their debts within the means of the debtor. It seemed reasonably certain Ms McEvoy would be able to comply with terms of the PIA, he said.

Being satisfied those and other conditions for approval of the PIA were met, he approved the arrangement.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times

LATEST STORIES