The High Court has approved a personal insolvency agreement (PIA) permitting the extinguishing of over €3.5 million unpaid unsecured debt for a bereaved business director. On Monday, the assent to the PIA was given by Mr Justice Alexander Owens for Gill McEvoy, 67, from Goatstown’s Larchfield Road, Dublin 14.
This case pertains to an outstanding debt of approximately €4.26 million, where the majority was owed to Pepper Finance Corporation Ireland DAC. The bulk of Pepper’s debt, €3.55 million, is unsecured and originates from a residual debt post the sale of an investment property. There is also an outstanding amount of €706,629 on the mortgage for Ms McEvoy’s Goatstown family home, valued around €850,000, along with €3,781 in dues to the Revenue Commissioners.
As per Keith Farry, representing Eugene McDarby, Ms McEvoy’s personal insolvency practitioner (PIP) briefed by Nicola Nevin & Co Solicitors, Ms McEvoy recently lost her spouse. Her assets include the family residence, a vehicle approximated at €12,000, and a one-seventh share of a Galway property inherited from her deceased husband.
As the director of Wildan Sports Ltd, Ms McEvoy draws €4,650 monthly director’s fees. After subtracting fixed monthly expenses and other costs, she could contribute a total of €43,577 towards her creditors over her PIA’s six-year lifespan.
Her husband’s one-seventh share of the Galway property, which she inherited, is exempt from the PIA as its selling is restricted due to stipulations in her mother-in-law’s will.
In accordance with the PIA, the home mortgage of Ms McEvoy will be revamped, including an extension of the mortgage duration to 288 months, by which time she will be 91 years old. For the first 24 months, the mortgage rate will be reduced to 3%, with a stipulated monthly payment of €1,764. Following this, a monthly repayment of €2,649 will be expected up to the 72nd month, at an ECB rate. For the rest of the mortgage term, monthly repayments will solely involve the interest amounting to €2,649.
The agreed value of €850,000 will cover any remaining balance on the mortgage when the loan reaches its maturity date, or upon the death of the mortgage holder, whichever occurs first. This will be settled through the property’s sale.
At the end of the six-year plan, repayments to unsecured creditors are expected to total €27,803, subtracting nearly €12,000 for the PIP’s fees, plus other expenses such as bank and legal costs.
Mr Farry declared that both Pepper and the Revenue Commissioners were supportive of the proposed PIA when it pertained to the management of secured debt. However, Pepper objected to dealing with unsecured debt in the same manner. Mr Farry also argued that the PIA met the requisite criteria for approval under the Personal Insolvency Act as it promises a better outcome for creditors compared to bankruptcy.
Mr Justice Owens believed that the PIA would allow Ms McEvoy to settle her debts without resorting to bankruptcy and enable her creditors to manage their debts based on her means. He was certain that Ms McEvoy would likely adhere to the PIA’s terms. Thus, having deemed all prerequisites for approval fulfilled, he gave his consent to the arrangement.