Mother and daughter face losing €55,000 Munster home

High Court accepts decision is harsh as it upholds objection to personal insolvency deal

A woman’s personal insolvency arrangement has been opposed by Pepper Finance Corporation (Ireland) DAC, which acquired a debt of €151,975 secured on a woman’s home in Munster.

A woman’s personal insolvency arrangement has been opposed by Pepper Finance Corporation (Ireland) DAC, which acquired a debt of €151,975 secured on a woman’s home in Munster.


A mother and daughter face losing their €55,000 home after the High Court upheld objections by a financial services firm to her proposed personal insolvency arrangement.

The PIA was opposed by Pepper Finance Corporation (Ireland) DAC, which acquired a debt of €151,975 secured on the woman’s home in Munster.

The woman, a part-time bookkeeper, hoped the PIA would mean she could stay in her home, but Pepper’s opposition led to it being voted down at a creditors’ meeting in June 2016. She has total debts of €166,643, and her other creditor, Affinity Credit Union Ltd, supported the PIA.

She ran into difficulties meeting mortgage payments in 2014 and made five late payments that year which were accepted by her lender. Her PIA proposed restructuring her mortgage, writing off a substantial portion of the debt, interest-only payments over six years, and payment of capital and interest on an annuity basis for the balance of the 25-year term.

After the Circuit Court upheld Pepper’s objection to the PIA, the woman appealed to the High Court.


Ms Justice Marie Baker, while expressing sympathy for the woman involved and describing the outcome as “harsh”, said she must dismiss the appeal.

The net issue was whether the debt to be dealt with by the PIA was a “relevant debt” within Section 115A(9) of the PIA Acts 2012-15, which allow the courts to approve a PIA to protect a family home after creditors have rejected it.

Section 115 defines a “relevant debt” as one secured over a debtor’s family home and requires a debtor in arrears before the January 1st, 2015 cut-off date for the provision to have entered into an alternative repayment arrangement with the secured creditor concerned.

The judge said the Oireachtas chose this particular means to afford protection for debtors with distressed mortgages.

Presumably to avoid “strategic defaulters” taking advantage of this scheme, the cut-off date of January 1st, 2015 was considered, “by economists at least”, when the worst of the financial and historic mortgage debt crisis would be over or would have stabilised.

She said €151,976 is owed to Pepper and the court is required to balance the interests of debtors and creditors.

The woman involved had purchased the house with her former partner, from whom she is estranged. It is now valued at about €55,000 and in significant negative equity.


While the woman undoubtedly had difficulties in meeting mortgage payments in 2014, because of the January 1st 2015 cut-off date and because she proactively engaged with her lender and made late payments by alternative means which were accepted, she was not actually in arrears by the cut-off date, the judge said.

The ad hoc acceptance of breach of the mortgage agreement could not be called an alternative arrangement and the woman had not reached an arrangement for amended terms and conditions of repayment necessary to bring her within Section 115A(9), she ruled.

The result is “harsh” for the woman, who has “made every effort and been diligent in meeting her repayments”, the judge said. Her mortgage debt is “relatively small” and she hoped her income will improve, as it had recently.

The court could not exercise its discretion in favour of the woman on account of its sympathy for her position arising from matters over which she had no personal control, she said.

Under the acts, the court cannot override the result of a meeting of creditors when the distressed debt secured against the family home was not distressed in one of the ways identified by the Oireachtas, she said.

The intention to protect a family home did not enable the court to override the vote of a creditor holding security over that property just because the property was a family home. Personal or family hardship was also not a factor identified in the Acts.