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Proposed write-down of mortgage debt in personal insolvency arrangement is not excessive

By: Ian Fitzharris BL

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High Court dismisses appeal against Circuit Court order which refused to uphold the appellant creditor bank's objections to a proposed Personal Insolvency Arrangement (PIA) of a mortgage debtor, where the court is satisfied that the Circuit Court was correct in its ruling that the bank (as a secured creditor) was to be treated as a separate class of creditor (to a credit union as an unsecured creditor) where it did not share a common interest with the credit union; and there is sufficient evidence before the court to establish that the proposed write-down of the mortgage debt in the PIA is not excessive.

Personal insolvency - arrears of mortgage repayments - personal insolvency arrangement proposal - rejection by bank, acceptance by credit union - notice of objection to proposal before Circuit Court - appeal against decision of Circuit Court to reject grounds of objection - rehearing - burden of proof - credit union as a separate class of creditor - no common interest between creditors - warehousing - no reason in principle why proposals for a PIA might not include a proposal for warehousing of part of secured debt - underlying issue of affordability - evidence - earnings into future - amount which would be recoverable by bank through bankruptcy - bank not prevented from pursuing estranged husband - pension arrangement excluded from court's consideration of proposal - proportionality - common good - rights of creditors - fair and equitable in relation to each class of creditors - bank's prediction of future living expenses inadequate - proposed write down of mortgage debt - debtor unlikely to afford a larger monthly mortgage payment - write-down not excessive - appeal dismissed

Note: This is intended to be a fair and accurate report of a decision made public by a court of law. Any errors should be notified to the editor and will be dealt with accordingly.

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