Insolvency deal allows retired couple to keep modified home and ensures ‘reasonable return’ for bank

Ulster Bank wanted couple to trade down and pay off liabilities but alternatives not appropriate, judge says

The High Court has approved personal insolvency arrangements (PIA) that will allow a retired couple, one of whom is a wheelchair user, to retain their Co Wexford home.

In a judgement approving PIAs in respect of Edward and Nuala McCarthy, who are aged in their 70s, Mr Justice Alexander Owens said the couple had got into financial difficulties in paying their mortgage due to their ill-health.

Approval for the PIAs was sought by the couple’s personal insolvency practitioner (PIP), Co Waterford-based Mitchell O’Brien, who was represented in the case by solicitor Louisa McKeon and barrister Keith Farry BL.

The couple reside at a bungalow located at Slaney Ash, Barntown Co Wexford, which they built after returning to Ireland from the UK. The house is valued at €350,000 and was acquired with a mortgage from Ulster Bank DAC. Due to Mrs McCarthy’s mobility issues, the judge said their home had to be modified.


In July 2020, some €42,000, including arrears was due and owing to the bank on foot of the mortgage agreement, the court noted. Arising out of their financial difficulties they entered into the personal insolvency process in 2020.

Under proposed PIAs, the couple’s debt to the bank would be capitalised and would be paid back in 156 monthly instalments over the next 13 years, with the funds coming from their Irish and UK pension incomes.

Trade down

The bank had wanted the couple to trade down and pay off their liabilities to it, the judge noted. The couple applied to the Circuit Court to have their PIAs, which were rejected by the bank, approved. That court’s refusal to approve them was appealed to the High Court.

Ruling on the appeals, Mr Justice Owens said the cases raised a number of issues. However, after considering the matter, he said he was satisfied that the couple could comply with the terms of the PIAs and that the costs of allowing them to remain in their home were not disproportionately large.

The judge said the evidence presented established that the debtors’ dwelling is not extravagant to their circumstances. They require two of the bedrooms because of their health problems, a further bedroom is available for visitors and the fourth is a “box room”.

“There is nothing disproportionate in the arrangements which permit them to retain this asset,” the judge said, adding that the McCarthy’s were “not being left with a big house at the expense of their creditors”.

Reasonable return

The value of the house is over five times that of the amount outstanding on the mortgage and there is no question but that the lender will be repaid in full and get a reasonable return on capital in the meantime, he said.

He said the debtors were not willing to consider moving from their home, and had “a good reason” given the house had been modified to cater for Mrs McCarthy’s needs.

The judge said various alternatives were considered by the debtors, such as trading down, social housing, mortgage to rent, renting a room and moving to rental accommodation, but that none of these was appropriate. If they were to sell, he said, they would have to find a new single storey residence and modify it for wheelchair accessibility to all rooms.

The judge said the main cost is the monthly restructured mortgage payment under the proposed PIAs. Those payments to the bank, the judge added, are affordable.

The matter will return before the court later this month.