High Court approves Personal Insolvency Arrangement significantly reducing mortgage debt

The High Court has approved a personal insolvency arrangement (PIA) for a woman, that involved a near €345,000 mortgage debt being written down by more than a half,  because she ran into arrears due to her husband’s gambling addiction.

Permanent TSB had objected to the PIA, insisting that the write-down, which saw the woman’s debt reduced from €343,785 to €160,000, which is the current market value of the woman’s home, was “draconian”.

Mr. Justice Denis McDonald said that the woman, who is in her 40s and has net monthly earnings of €2,900, is now separated from her husband and lives in the home with their teenage daughter.

In a sworn statement, the woman said that her now ex-husband had moved to the United Kingdom in 2015 and does not make any contribution towards the mortgage repayments or child maintenance.

Furthermore, the woman said that her husband had developed a gambling addiction and had borrowed €7,000 from “loan sharks” in order to place bets. The woman said that her husband’s debt came too much to repay and that she had to borrow money from her sister to repay the loan sharks, who applied increasing pressure for repayment.

Her husband’s gambling addiction became worse, after which she fell into arrears with the mortgage repayments and also incurred other debts.

The bank first took proceedings against the woman in the Circuit Court where her Personal Insolvency Practitioner proposed the personal insolvency arrangement; it was then appealed by the bank at the High Court.

The balance of €173,785 would be treated as unsecured debt, and the bank and a credit union which was owed €3,752 would each get an eight percent dividend. At the end of the PIA’s six-year term, the rest of the woman’s unsecured debt would be written off.

‍