The High Court has confirmed that personal insolvency arrangements for Aidan and Tracey Quirke should take effect, overturning the Circuit Court’s refusal of their applications. The arrangements restructure the couple’s mortgage on their home in Rathwire, Co Westmeath.
In a judgment delivered on 16 March 2021, Mr Justice Mark Sanfey found the arrangements affordable and sustainable, while acknowledging that keeping up the payments would require discipline, particularly while the couple’s dependent children were in college. He directed that the case return to the personal insolvency list for submissions on the terms of the court’s order. The judgment did not set out those final terms.
The couple appealed the Circuit (Personal Insolvency) Court’s refusal of their applications under section 115A of the Personal Insolvency Acts. Bank of Ireland, the sole creditor for each debtor, had rejected the proposed arrangements. The applications were separate, although they concerned the same secured home loan.
The proposals provide for mortgage repayments of €1,013.94 a month over an extended 300-month term, at 4.49% interest. The bank was owed €306,877.61, and the parties agreed the home’s market value was €176,000. The plans included allowances for the children’s college expenses. The judge said dependent children attending college could qualify as a special circumstance warranting an allowance in a personal insolvency arrangement.
The bank argued that the arrangements were unaffordable and unsustainable, citing the couple’s past payment record, the costs of the separate applications, and the way the live loan balance had been calculated. It also said the delay since rejecting the plans meant college expenses and practitioner fees would fall due at the same time. The couple’s counsel told the court that the practitioner would not require fees to be paid if doing so prevented payment of other costs, particularly the mortgage.
The judge accepted that the couple’s payment history was poor, but found that both were now in full-time employment and understood the consequences of failing to meet the terms. He considered the bank would not obtain a better result through bankruptcy or by enforcing its existing possession order. The arrangements also included provisions for recovery of written-off capital if they failed and the home was sold.
The court rejected the bank’s challenge to the practitioner’s fees and decision to make separate applications, and found the live balance had been calculated appropriately. The judgment confirms the arrangements’ coming into effect; the order’s precise terms were left for the further listing.