6 year Personal Insolvency Arrangement

6 year Personal Insolvency Arrangement

By sara
Monday, 1st October 2018
Filed under:

6 year Personal Insolvency Arrangement with Appeal Required Resulted in €216,000 Written Off and Retained Family Home for Debtor

Background

Harry and Rosie Byrne are both 51 and live in Munster. They are married and all of their dependants are over 18. Harry is employed full time as a site engineer. Rosie is in receipt of disability benefit due to an accident she had in 2013. Her situation is unlikely to change in the future.

Harry and Rosie are in arrears on their mortgage. Since Rosie had her accident, they no longer have two salaries coming into the house. Their house is valued at €150,000, but their mortgage, including arrears of €30,000, amounts to €320,000. Their negative equity is €170,000. They also have a credit union debt of €20,000, a credit card debt of €1,000 and old Revenue debt of €25,000, from when Harry was self-employed 5 years ago.

They have been trying to pay their credit commitments, but it became clear that they could no longer afford to keep up with their repayments as they fell due.

Process

Harry and Rosie met with a case manager from Grant Thornton Debt Solutions. They went through all of the options available to them. Once the protective certificate was in place Grant Thornton Debt Solutions started to negotiate the proposal they agreed with the Harry and Rosie. All creditors, including Revenue, agreed to the proposal, however their mortgage provider did not. They would not agree to write off the negative equity of €170,000 on the family home mortgage. This was disappointing. Fortunately, Harry and Rose were able to appeal their rejected case via the Abhaile Scheme, free of charge. This scheme is government funded and it allows debtors to appeal the creditor’s decision. A Personal Insolvency Judge has the ultimate decision in the outcome of the arrangement. The judge agreed with Rosie and Harry’s proposal. Their rejection was overturned and the Personal Insolvency Arrangement PIA was approved.

Outcome

  • 6 year Personal Insolvency Arrangement (PIA).
  • Mortgage was reduced down to the value of the house, which is €150,000. Their repayments will now be €900 a month until retirement age, which they can afford.
  • Negative equity on the family home of €170,000 was written off.
  • In total €216,000 debt was written off.
  • For 6 years they will pay €300 a month into their arrangement. This means they repay €21,600 to their creditors.
  • Grant Thornton Debt Solutions deduct a small amount of the monthly instalments to cover their fee as they do not change any upfront or additional fees to the debtors.
  • After the 6 years Rosie and Harry are returned to solvency and are only left with their mortgage payment of €900 a month. All other debt is legally written off.

In a similar situation? Contact Us

If you are in a similar situation to Harry and Rosie, a Personal Insolvency Arrangement (PIA) could be an option for you to overcome your debt problem. For free and confidential advice, contact us at 087 7667731.

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