A High Court judge has refused to approve proposed personal insolvency arrangements for a couple aimed at allowing their family to remain in a five-bedroom detached home, valued at €1m in 2018.
Allen and Elizabeth Nuzum had argued that although their home's value exceeded their debt to a vulture fund by €290,000, this was not enough for a suitable alternative property for themselves, their four young children and an au pair.
Their home is in a gated community at Kribensis Manor, Williamstown Stud, Clonee, Co Meath.
The couple, both 48, are directors of a road construction company, while Ms Nuzum has also operated a designer clothing business.
In a judgment yesterday, Mr Justice Denis McDonald upheld arguments by Promontoria (Aran) Ltd, the couple's only creditor, that the costs of enabling them to stay in their home, on which the debt is secured, were "excessive and disproportionately large".
Promontoria (Aran) Ltd is an Irish subsidiary of giant vulture fund Cerberus and bought the couple's debt from Ulster Bank.
The costs were not justified when the significant positive equity in their home would give them sufficient funds to acquire a "more modest replacement home", the judge said. He was also concerned the proposed PIAs, involving monthly repayments of €3,376 over 30 years until the couple are in their late 70s, carried a "very real risk" of their future insolvency.
It was hard to see how they could maintain repayments and meet any exceptional expense that would almost inevitably arise, he added.
The judge concluded the retention of the family home was not in the debtor's interest and nor was the public interest served by confirming the PIAs.
They would be better off, in terms of resolving their indebtedness, by selling their home and acquiring a smaller one, he said.
In an affidavit, Ms Nuzum said she had considered trading down, social housing, mortgage to rent and rental accommodation with her personal insolvency practitioner, but none of these options was appropriate.
"I went on the Daft website and could not find a five-bedroom house for €290,000. I say that with such equity left over, I would not be eligible for social housing or the mortgage to rent scheme," she said.
But the judge said while it was unlikely the family could get a five-bed house in Dublin for €300,000, the average asking price for a house in north Dublin was €312,000 and he did not accept this was "inherently unsuitable" for them.
"There are a great number of families of two parents with four children living in three-bedroomed houses," he said. It might be painful to downsize but it was better than staying in a house which, on the evidence, was plainly beyond their means, he added.