The High Court has rejected a proposed restructuring of a Ballyhale couple’s mortgage which would have extended repayments over 32 years and left an estimated €303,000 balance to be cleared at the end of the term.
Fiona and Andrew Maloney, of Kiltorcan, Ballyhale, County Kilkenny, appealed Circuit Court decisions refusing linked Personal Insolvency Arrangements. Their home is valued at €365,000 and their mortgage debt stood at more than €361,000, including arrears of about €91,189.
Under the proposals, no mortgage payments would be made for most of the first year while available income went towards the insolvency practitioner’s fee and a small dividend to unsecured creditors. Interest would continue to accrue.
Payments would then vary considerably over the extended term. They would begin at €1,100 per month, fall to €900, later rise to €1,400 and eventually reduce to €750. Mr Justice Alexander Owens said the arrangement would effectively operate as an interest-only mortgage for about 17 years.
The court found that the couple’s current and projected income did not establish a sustainable ability to meet those commitments. Evidence showed projected monthly shortfalls of between €132 and €622 against reasonable living expenses during the first seven years.
The judge also placed weight on their previous payment history. A possession order had been obtained in 2016 and enforcement was sought in 2022. The reasons why large arrears accumulated had not been adequately explained, although the couple had been paying €1,450 per month since receiving a protective certificate.
The court rejected projections that future increases in house value, pension lump sums, refinancing or a later sale would enable the final €303,000 debt to be cleared. Those assumptions were described as speculative.
The appeals were dismissed and the Circuit Court orders affirmed. The question of appeal costs was adjourned.