Subscriber OnlyCourts

Woman has €2.7m of €3m debt written off for just over €1,300

Personal insolvency arrangement over mostly the same loans approved for woman’s husband by High Court

A woman has had €2.7 million of a near €3 million debt written off in return for a €1,316 payment to creditors and will retain her family home under the terms of a personal insolvency arrangement (PIA) approved by the High Court.

A similar arrangement was separately approved for the woman’s husband who had €2.66 million debt, arising from mostly the same loans, written off for a €1,316 payment.

The interlocking arrangements were approved by Mr Justice Alexander Owens for Thomas Johnson and his wife Valerie, both in their 60s and retired, with an address at Drumree Road, Dunshaughlin, Co Meath. Ms Johnson is a full-time carer for her mother, the court heard.

On the application on Monday of barrister Keith Farry for personal insolvency practitioner Nicholas O’Dwyer for both applicants, the judge was satisfied the arrangements met the criteria for approval under the Personal Insolvency Acts.


In court documents, it was stated Ms Johnson’s total debt is €2.984 million of which about €2.2 million, on foot of personal loans, is owed to Everyday Finance which was among several unsecured creditors who had voted against the proposed PIA at a creditors meeting. Mr Johnson’s total debt, concerning mostly the same loans, was €2.976 million.

The proposed PIA was supported by Mars Capital Ireland DAC, a secured creditor owed about €618,000 on foot of a mortgage secured on the couple’s home in Dunshaughlin. That property has a current market value of €275,000, meaning a deficit of some €343,000.

Under the PIA, Ms Johnson will pay €1,316 to creditors in exchange for having €2.66 million of debt written off.

In an affidavit, Ms Johnson said a lump sum of €200,000 is required to be paid within six months of court approval of the PIA. That will be paid from the proceeds of the sale of her mother’s home in Sutton, Co Dublin, she said. According to court documents, her mother will move into her daughter’s home.

The Dunshaughlin home mortgage balance, under the PIA, will be reduced to €275,000 and the interest rate reduced from 4.15 per cent to 3 per cent fixed. Mortgage payments of €665 will be paid for the six-month term of the PIA and thereafter for the duration of an extended mortgage term of 11 years. The outstanding balance of €343,109 will then be written off.

Ms Johnson’s Mercedes Vito car was excluded from the PIA due it to being required to care for her mother. Her husband’s Nissan van was also excluded from his PIA due to the location of their home.

Ms Johnson’s net income was put at €1,851 monthly and her husband’s at €1,243. After deduction of set costs, reasonable living expenses, and mortgage repayments, a monthly contribution of €21.60 from her, and €10.99 from him, was available for the PIA.

In an affidavit, Mr O’Dwyer said the PIA is part of interlocking arrangements allowing for a greater distribution to creditors than would be the case under bankruptcy proceedings. He thought the arrangements had a reasonable prospect of being implemented and provided a better outcome for each of the debtors than bankruptcy. As required under the Act, more than half of a particular class of creditor supported the arrangement, he said.

Sign up for push alerts and have the best news, analysis and comment delivered directly to your phone

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times