Separated Limerick couple secure €3m debt write-off for €2,000

Arrangement involves some debts being repaid with help from wife’s parents

A separated Limerick couple had almost €3 million worth of debt written off for a payment of €2,000 in a personal insolvency arrangement signed off by the High Court this week.

The couple owed the bulk of the unsecured debt to Bank of Ireland arising from a failed hotel and newsagent business. They also owed an additional €257,000 secured against the family home.

Under the court-approved financial rescue, debts of €121,176 due to the Revenue Commissioners and a further €35,524 to a former supplier to their business – both secured against the family home – are being repaid with financial assistance from the woman's parents.

As a condition of her parents discharging those debts, the husband has agreed to transfer his half share in the home to his wife. The couple have been separated for more than five years and live apart.


The woman will retain the family home, currently valued at €450,000, where she is raising two of her three children. An older child has left the home and is studying at a third-level institution.

The 49-year-old husband is insolvent and agreed to transfer his share in the family home to his wife with a view to reaching a full and final settlement with his creditors.

He wanted his creditors to be treated fairly while protecting reasonable living expenses – €730 a month from his net monthly income of €2,538 from his work as a bar manager – and enabling his wife to retain the family home.

Some €2.97 million of the unsecured debt was jointly owed with his wife. In relation to this, the husband has made a lump sum cash payment of €2,000. He wanted to resolve their joint debts so that they could progress with their divorce proceedings.

This was the second significant debt write-off approved in a personal insolvency arrangement in Monday’s High Court list.

Return to solvency

The personal insolvency arrangement was constructed with the aim of returning the husband to solvency in a fair, transparent and equitable manner while seeking to respect the household’s reasonable living expenses and the continuing occupation of the wife and her children of the family home.

Mr Justice Denis McDonald approved the arrangement on Monday. He complimented the outcome of the financial scheme and the work of the personal insolvency practitioner in devising it.

Maurice Lenihan, a personal insolvency practitioner at Moore Stephens Debt Solutions in Limerick, drafted the arrangement, which was presented to the High Court by Keith Farry BL.

The arrangement combined a couple’s complicated divorce proceedings and insolvency arrangement arising from the failure of a marriage and a business, returning the husband to solvency and keeping the wife and her children in the family home with a sustainable mortgage.

Two mortgages totalling €98,000 to Bank of Ireland on the home will be repaid over a term lasting just over 20 years, with monthly repayments totalling almost €600 currently on a variable interest rate.

The case demonstrates the use of personal insolvency arrangements in family law case settlements where juggling a divorcing couple’s substantial debts and the future of the family home can prove difficult to manage.

Simon Carswell

Simon Carswell

Simon Carswell is News Editor of The Irish Times