The High Court today approved the Personal Insolvency Arrangement (PIA) that will see a 54-year-old female, single, shop assistant continue to make mortgage repayments on her family home until she is 90 years of age.
Mr Justice Mark Sanfey approved the PIA in respect of Ms Esther Kirwan, Moycarkey, Thurles, Co Tipperary, in what is regarded as an important test case in the area of personal insolvency.
The court heard Ms Kirwan, who resides alone in a three-bedroom bungalow, has debts of €108,000. Of this debt, some €83,000 is owed to Start Mortgages in respect of the mortgage on her home, currently valued at €145,000. The remainder is owed to Allied Irish Bank for loans advanced to her former business and the Revenue Commissioners.
Under the terms of the PIA her mortgage will be restructured, but is not being reduced. She will make monthly payments of €214 for the next 420 months (35 years) to cover the interest on her mortgage, meaning she will continue to make payments until she is 90 years of age.
Should she die before reaching that age, the balance of what is owed to Start Mortgages will be paid from the proceeds of the sale of her estate.
Under the PIA the loan will be payable on the expiry of the 420-month term or on her death, whichever occurs first.
Last year the Circuit Court refused to approve Ms Kirwan’s proposed PIA because it was uncomfortable with the possibility Ms Kirwan might be compelled to sell her home to satisfy a mortgage debt.
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