Mother to lose her home over mortgage difficulties
The PIA was opposed by Pepper Finance Corporation (Ireland) DAC, which held a debt of €151,975 secured on the woman's home in Co Tipperary.
The woman, a part-time book- keeper, 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.
The woman ran into difficulties in 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 and describing the outcome as “harsh”, said she must dismiss the appeal.
The net issue was whether the debt was a “relevant debt” within Section 115A(9) of the PIA Acts 2012-15, which allow the courts 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 1, 2015, cut-off for the provision to have entered into an alternative arrangement with the secured creditor concerned.
The judge said €151,976 is owed to Pepper and the court is required to balance interests of debtors and creditors.
While the woman undoubtedly had difficulties meeting mortgage payments in 2014, because of the January 1, 2015, cut-off 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.
