Debtors may live beneath Reasonable Living Expenses whilst going through a Personal Insolvency Arrangement.

Jim Stafford

Frequent Poster
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The High Court has found that Debtors may live beneath Reasonable Living Expenses whilst going through a Personal Insolvency Arrangement.

The Court recently gave judgment in which it overturned two Circuit Court decisions in respect of the matter.

The central issue before the High Court was whether it is permitted under the Acts to construct a PIA that requires a Debtor to live below the Reasonable living Expenses guidelines published by the Insolvency Service of Ireland. The debtors involved argued that it was possible, and that the RLE Guidelines are “guidelines”, and that the concept of a “reasonable standard of living” is a fluid test that will be different for every family.

I set out below a link to the judgment.


The Hurley PIA referred to in the case is a great case study of how a PIA may save a family home.

Jim Stafford
 
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Brendan Burgess

Founder
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38,095
Jim

They are very interesting cases and should be required reading for anyone who says that the banks have all the cards and that borrowers are unprotected.

I was astonished by this bit

Insofar as the mortgage loan is concerned, she is jointly liable on this loan in the sum of €161,131.29. However, the value of that home is no more than €95,000. In her case, the proposed arrangement involves the following features:-


  • (a) The amount due in respect of the loan secured on her family home will be reduced to the value of the property namely €95,000. The balance of €66,131 will be written off subject to payment of the dividend described in subpara. (c) below.

How does that work with regard to her joint borrower? Presumably he still owes it and remains liable for it.

But is it no longer secured on the home?

Brendan
 
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