Insolvency case over mortgage debt before court

Wednesday 27 November 2013 14.05
First insolvency case involving mortgage borrowings before the courts
First insolvency case involving mortgage borrowings before the courts

The first insolvency case involving a family with mortgage borrowings has come before the courts under the new system established to tackle Ireland's personal debt crisis.

RTÉ News has learned that the case came before Trim Circuit Court last week and involved a family in the Leinster area with over €600,000 of borrowings.

Until now, insolvency cases before the courts have not involved mortgage debt.

The family's personal insolvency practitioner, Dungarvan-based Mitchell O'Brien, said he was confident of a successful deal.

The borrowers have mortgages, unsecured debt and buy-to-let property.

Last week, Judge Mary O'Malley Costello granted a protective certificate, meaning there will be 70 days to negotiate a deal with the seven creditors involved.

The lenders would have to agree a deal at a creditors' meeting, which is likely to happen before Christmas.

It is expected this will result in a significant writedown of mortgage debt.

Meanwhile, the cost of entering bankruptcy is going to be cut from €1,450 to €750.

The development has emerged following the dropping of a requirement that details of a bankruptcy be published in a national newspaper.

Instead the details of a bankruptcy will only need to appear on the website of the Insolvency Service of Ireland. 

An amendment will be introduced in the Seanad later today as part of the Bankruptcy Act 1988, which will make the change.