A Rathfarnham woman has been refused court approval for a Personal Insolvency Arrangement after failing to establish that pension assets worth about €167,643 were not readily available to pay her debts.
Bernadette O’Shea, aged 66, sought approval of an arrangement opposed by Pepper Finance Corporation. Her husband, John Kinsella, was the subject of a separate interlocking insolvency application heard at the same time.
The couple jointly own their principal private residence in Rathfarnham. The court was told it was worth €575,000, with a mortgage balance of €154,306.08, leaving equity of about €420,694. Pepper is the mortgage creditor.
The proposed arrangement would have reduced the mortgage through a €25,000 pension lump sum, extended its term to 180 months and fixed the interest rate at 3%. It also proposed an €18,000 lump-sum payment towards Revenue debt.
Pepper argued that Ms O’Shea was not insolvent because of the substantial equity in the home and her pension assets. Judge Meehan rejected Pepper’s evidence that the family home itself was readily realisable. He noted that selling a home generally requires time and alternative accommodation, and Pepper had produced no specialist property evidence showing otherwise in this case.
The pension issue proved decisive. The court had evidence that Ms O’Shea held three pension investments valued at a combined €167,642.99. However, despite repeated requests from Pepper, the court was not given details showing what benefits could be accessed or when.
Under the Personal Insolvency Acts, a debtor seeking an arrangement must prove that they cannot pay debts as they fall due. Judge Meehan held that Ms O’Shea had not discharged that burden because the accessibility of substantial pension funds remained unexplained.
The court therefore found she had not established insolvency and was ineligible to propose the arrangement. It did not decide Pepper’s additional objections that the proposal was unsustainable, unfairly prejudicial or failed to maximise repayment.