Man’s €1.1m debt written off for €857 under arrangement approved by High Court

A Co Roscommon man has had €1.1 million debts written off for €857 under a personal insolvency arrangement approved by the High Court.

Fergal Shine will be left with his family home at Waterville, Bealnamulla, Athlone, Co Roscommon currently valued at some €245,000 with an outstanding mortgage balance of some €362,000. Under the PIA, the mortgage will be written down to €245,000. Judgment mortgages obtained by some creditors against the property will be treated as unsecured debt because the property is in negative equity and will also be written off as part of the arrangement.

According to the Personal Insolvency Arrangements (PIA), Mr Shine’s debts arose due to the failure of a construction company he shared with his brother and father which was forced to go into liquidation in 2008. Mr Shine had signed personal guarantees for the business debts.

In the PIA, it was claimed the then mortgage provider, ACC Bank, had promised a deal would be done on the mortgage following receipt of some €25,000 net proceeds of the sale on an apartment but no deal was ever offered.

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Under the PIA, Mr Shine (52), a married father of three and a sales assistant with Arcade Interiors Ltd, will continue to make payments on the home mortgage on foot of an approved interest rate of 2.3 per cent for 10 years. The mortgage has a 20-year term and the payments on it will increase after the ten years as his children, now aged between seven and 16, lose dependency status and complete their education.

On Monday, Mr Justice Alexander Owens granted an application by Keith Farry BL, instructed by solicitor Kayanne Horgan, for Mr Shine’s Personal Insolvency Practitioner, Colm Arthur, to approve the arrangement.

The judge was told Pepper Finance (Ireland) DAC, whose debt is €362,000 under the mortgage, with the unsecured balance owed standing at €117,643, was withdrawing its objection to the PIA following agreement to implement a variation to it.

Mr Shine’s other creditors include Chadwicks Group, owed some €111,000, and Bank of Ireland, owed some €869,000. Smaller creditors include James McMahon Ltd, owed €15,265 and McMenamin Engineering Ltd, owed €5,028.

The net household income of the family is some €3,500 out of which the living expenses are some €2,225 and the mortgage payment is €1,274, the court heard. There will be a total debtor lump sum contribution of €3,000 under the PIA. After the PIP fee of €2,143 is paid, there will be some €857 available for unsecured creditors.

Mr Farry said the PIA does not put creditors in a worse position than if Mr Shine was to be adjudicated bankrupt.

Counsel noted the Bank of Ireland debt of €869,000 relates to a site in Westmeath, now valued at €5,000, which will be sold with the benefit of Mr Shine’s 50 per cent interest in that going to the secured creditor. Another site, at Boganfinn in Roscommon, with a debt of €2,500 and an agreed valuation of €20,000, will also be sold with the benefit of Mr Shine’s one third interest going to the secured creditor.

Mr Justice Owens was satisfied the PIA met the criteria for approval under the Personal Insolvency Acts. There was “nothing for anyone” in the event of bankruptcy because the assets are all charged properties, he noted.

The judge approved a separate PIA for Marese Shine, wife of the debtor and store manager with Arcade Interiors Ltd, whose indebtedness is limited to her share of the family home mortgage balance.