Stonemason has mortgage cut by €223k in debt deal
Published 07/08/2014 | 02:30
A stonemason has secured a €223,000 write-down on his €346,390 family home mortgage as part of a Personal Insolvency Arrangement (PIA).
The write-down by KBC Bank was approved by one of the State's six personal insolvency judges, Judge Michael Meaghan.
At Ennis Circuit Court, the judge approved the PIA for the 59-year-old married man from Co Clare.
Earlier this year, the judge granted court protection to the man, who had debts from the property collapse totalling €2.3m. The judge said at the time that the debt amount was the largest he had come across during his time working on personal insolvency cases. He said that the amount wasn't far under the threshold of €3m on secured debt put in place by the Insolvency Service of Ireland (ISI).
The court's protection allowed the stonemason's Personal Insolvency Practitioner (PIP), Jim Stafford, to negotiate with secured and unsecured creditors who voted 100pc in favour of the PIA at a creditors' meeting.
Judge Meaghan said that it was quite a feat for all involved to agree the PIA because of the complexities involved.
The judge said that the man did not have to sell his family home.
Last year, the man's PIP, Jim Stafford got into hot water after stating that solicitors or consultants may need larger houses than PAYE workers. He later apologised for the remarks. Mr Stafford was on annual leave yesterday and not available for comment on the stonemason's PIA.
According to Judge Meaghan, the write-down of the mortgage on the man's family home comes with the proviso that he pay KBC Bank a dividend of €15,000 as an unsecured creditor. He added that KBC Bank was to reduce the term of the mortgage by three years and three months.
According to the PIA, the man is to pay a revised monthly mortgage payment of €1,200 on the family home for 10 years and three months up to his 70th birthday. Judge Meaghan said that the man's natural stone products business collapsed last year and went into liquidation.
The judge said that due to the low income of the debtor, he was unable to engage in a multi-year payment plan.
Instead, the man will make available a lump sum to pay a dividend to unsecured creditors by selling all unencumbered property.
The stonemason is to sell the following assets in order to pay a dividend to his creditors; a farm and stables totalling 31.86 hectares; a residential buy-to-let property; a residential buy-to-let apartment; a commercial buy-to-let property and several other plots of land.
The figures shows that unsecured creditors may expect a dividend of 3.48pc and a further dividend of 2.86pc from the man's wife. The estimated total to be realised from the stonemason's secured assets is €604,939 and the amount owed to unsecured creditors is €1.98m.
The unsecured creditors are listed as KBC €333,683; EBS €423,428; Ulster Bank €829,982; Bank of Ireland €8,926; Bank of Scotland €85,536; Emberon Finance Ltd €29,928; Vanguard Auto Finance €195,343 and Niamh Perrotta €75,000.
The amount due to the PIP is €12,546 and this compares to €59,800 that would be owed arising from a bankruptcy process.