Couple Fails Insolvency Approval Despite ‘Borrowed Time
- A Kilkenny couple's attempt to restructure €361,000 in mortgage debt to €303,000 over 32 years has been denied by the High Court,ending a period of nearly ten years...
- Justice Alexander Owens of the High Court rejected the Personal Insolvency Arrangement (PIA) proposed by andrew and Fiona Maloney of Kiltorcan, Ballyhale, Co.Kilkenny as reported by the Irish...
- The proposed PIA involved repaying €303,000 over 32 years, after which the remaining debt would be settled by selling or mortgaging their home, currently valued at €365,000.
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Kilkenny Couple’s Insolvency Plan Rejected: A Decade of “Borrowed Time” Ends in Court
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A Kilkenny couple’s attempt to restructure €361,000 in mortgage debt to €303,000 over 32 years has been denied by the High Court,ending a period of nearly ten years where they lived with limited engagement with their lender.
The Case: Maloney v. [Unnamed Lender]
On February 27, 2024, Mr. Justice Alexander Owens of the High Court rejected the Personal Insolvency Arrangement (PIA) proposed by andrew and Fiona Maloney of Kiltorcan, Ballyhale, Co.Kilkenny as reported by the Irish Times. The couple, parents of four children, sought to reduce their mortgage debt from €361,000 to €303,000, effectively converting a portion of their repayments into an interest-free period for 17 years.
The proposed PIA involved repaying €303,000 over 32 years, after which the remaining debt would be settled by selling or mortgaging their home, currently valued at €365,000. The court found the plan relied on “unidentifiable” means of repayment after the 32-year period.
Timeline of Events
| date | Event |
|---|---|
| 2016 | Lender obtained an order for possession of the Maloney’s property. |
| 2022 | Lender attempted to execute the possession order following the easing of Covid-19 restrictions. |
| February 27, 2024 | High Court rejects the Maloney’s Personal Insolvency Arrangement (PIA). |
Key Details of the Rejected PIA
The core issue, as outlined by Mr. Justice Owens, was the plan’s reliance on an extended period of interest-free borrowing.The arrangement essentially proposed transforming a standard repayment mortgage into an interest-only mortgage for €303,000, with repayment dependent on unspecified future income. the Irish Times details the judge’s concern that this lacked a concrete foundation.
The lender had secured a possession order in 2016, but its enforcement was delayed until 2022. Throughout this period, the Maloneys had “very little engagement” with their lender, leading the court to characterize their situation as living “on borrowed time.”
The Court’s Reasoning
Mr. Justice Owens emphasized that while the court acknowledges the difficulties faced by debtors,PIAs must be sustainable and based on realistic repayment projections.He noted the lender’s forbearance in not aggressively pursuing the possession order, which allowed the maloneys to continue living in the property without fulfilling their loan obligations. the Irish Times reports the judge stating the couple benefitted from residing in a home purchased with un-repaid loans.