Can a PIA be used where there is plenty of positive equity?

[Brendan Burgess]

Rough facts:
Married couple
Home worth: €300k
Mortgage: €200k including €70k arrears
No other creditors

Enough income to repay the interest in full and some of the capital.

Bank has said it is unsustainable and appeal against this decision refused.
Court proceedings have been running for a couple of years at this stage and will probably come to a head at the next hearing.

Is there any point in a PIA?

Brendan

 

[Jim Stafford]

Yes, you can do a PIA with positive equity.

The PIA should be successful if they can demonstrate that the loan could be paid in full by the time they are, say, 70 years old.

A PIA could also be successful (but would be more challenging) if they agreed to continue paying interest and some capital, and then "trade down" at 70 years and pay off the residual debt at that time etc.

A consideration is what court is going to hear any re-possession proceedings. Some courts might resist making a re-possession order given that full interest and some capital is being paid.


Jim Stafford