The Circuit Court has refused to approve a personal insolvency arrangement for a 59-year-old Ballinteer homeowner which proposed interest-only mortgage payments for the rest of his life and repayment of the principal debt from his estate after his death.
David Kenna’s principal private residence at Hilton Lodge, Ballinteer Avenue, Dublin 16, was valued at €550,000, with a mortgage balance of €254,629.22. Pepper Finance Corporation Ireland DAC, the secured mortgage creditor, opposed the proposed arrangement.
Under the plan, Kenna would make 36 monthly payments of €324.66 into the insolvency arrangement. His mortgage would then operate on an interest-only basis for his lifetime, at 3% during the three-year arrangement and thereafter at the ECB rate with no margin.
The remaining principal, stated in the arrangement as €267,308.29, was intended to be paid after his death from his estate or the sale of the property. Interest would continue accruing after death until repayment.
Judge Gerard Meehan held on 23 February 2026 that these so-called lifetime clauses could not satisfy the requirements for a court-imposed arrangement under section 115A of the Personal Insolvency Acts.
The judge relied on the High Court decision in Re Fennell, which addressed a similar proposal extending mortgage obligations beyond a debtor’s expected lifetime.
Although Kenna’s proposal formally ended the mortgage term on his death, the court found that important obligations would continue afterwards. His executor, rather than Kenna himself, would have to arrange repayment, the mortgage security would remain and interest would continue to accrue.
The court therefore could not be satisfied that Kenna was reasonably likely to comply with all terms of the arrangement.
It also held that paying interest alone for life would not resolve his indebtedness: the principal debt would remain outstanding at death.
The application to impose the personal insolvency arrangement over Pepper’s objection was refused.