This month saw several very positive developments in Personal Insolvency.
The High Court dealt with an appeal by a couple where KBC had rejected their proposal for a Personal Insolvency Arrangement. The couple owed €285,000 to KBC on their home mortgage and their home was worth €105,000. The proposal was that the debt would be written down to €120,000 and then extended over a longer period making the loan sustainable. KBC objected but offered a split mortgage where €135,000 would be shelved for 23 years on 0% interest.
Judge Baker in the High Court rejected KBC’s position and ordered the write down.
What is interesting about this case is that the High Court directed a substantial write down on the mortgage debt even though the bank had offered a split. The Court was concerned to bring certainty to the couple’s position and the continued existence of a debt – even shelved – did not achieve this.
This is one of a growing number of cases where the new laws give a Court power to enforce a Personal Insolvency Arrangement once the deal is found to be fair and equitable. The bottom line is that the family have a long term sustainable mortgage and all their other debts have been dealt with also.
The Insolvency Services have also recently released figures on debt resolutions.
Applications for Personal Insolvency Arrangements are up 128%. In over 90% of cases the home is saved. 30% of all cases involve mortgage debt write off with average write offs of mortgage debt now exceeding €90,000.
It is very clear to us that the law is now very much on the side of the struggling home owner. The key for a borrower in arrears is to make what payments you can and to seek advice from a Personal Insolvency Practitioner.
And the good news is that the advice will not cost anything.
Call us today on 01-5240000 for more information.