Dear Reader,

Welcome to the first edition of our Personal Insolvency update.

This edition examines the recent landmark High Court rulings of Judge Baker on the treatment of split mortgages and deserted spouses under the personal insolvency process.

This is a game changer for home owners wishing to resolve their debts through the personal insolvency legislation.

We hope you'll find the update useful and if you have any queries don't hesitate to contact Mark Ryan, PIP, Personal Insolvency Department by email at mryan@quintas.ie or call 021 4641400.

A landmark High Court judgment of Judge Baker on the 22^nd May 2017 ruled that a proposed split mortgage restructure as part of a Personal Insolvency Arrangement (PIA) was not financially sustainable. This ruling will affect how mortgages are to be treated in formal debt deals. This is a major setback for banks given that the Central Bank of Ireland’s 2016 Quarter 4 Statistics on Residential Mortgage Arrears confirmed thatbanks were continuing to move away from short term mortgage restructures to longer term arrangements such as split mortgages. According to the statistics out of 120,944 restructured family home mortgage accounts at the end of December 2016 split mortgages showed a significant increase accounting for 22% of all restructured accounts.

This is a link to the Central Bank of Ireland’s Press Release on Residential Mortgage Arrears Statistics: Q4 2016 – Click here.

Another High Court recent ruling Re JD (a debtor) has set a precedence on how creditors consider PIA’s for individuals where their spouse is no longer living in the property and no longer assisting to repay the couple’s joint debts.

This judgment is very significant given the number of personal insolvency cases involving separated couples. The Insolvency Service of Ireland’s Quarter 1 2017 Statistics revealed that divorced or separated individuals accounted for 15.4% of applications seeking debt relief. In mortgage arrears cases separated couples have caused difficulties, in particular where one spouse has washed their hands from dealing with any debt. Many PIA’s across the country that had a good chance of being agreed by a majority of creditors fell at the last hurdle due to the non-engaging spouse.  

Do you wish to make a proposal for a Personal Insolvency Arrangement or do you wish to learn more about the personal insolvency process? Or are you a home owner and in mortgage arrears and want to know whether you would be eligible for a MABS voucher to meet and obtain free initial advice from Mark Ryan, PIP, setting your options, then contact the Personal Insolvency Department at Quintas.