First debt settlement arrangement gets final approval at Monaghan Circuit Court

A Health Service Executive worker from Donegal has become the first person in the country to have a debt settlement arrangement formally approved by the courts. His creditors will receive just over 20 per cent of what they were owed provided his financial circumstances do not change in the next five years.

Judge William Lyster approved the arrangement at a sitting of the Circuit Court in Monaghan town yesterday afternoon. The man's creditors had agreed to the arrangement last month.

The debtor, in his 40s, who was not in the court, had unsecured debts of €117,500 and assets totalling €5,600, according to figures filed with the court. His monthly income was €3,679 and after his outgoings were deducted, he had €530 left over to pay his creditors and to fund the management of his debt settlement arrangement by his personal insolvency practitioner (Pip).

The level of writedown of his debt was not revealed, but based on an available fund of €530 a month or €31,800 over the term of the arrangement, and deducting Pip fees, creditors are likely to receive in the region of 22 per cent of what they were owed, giving a debt writedown of 78 per cent.

If the debtor’s financial circumstances improve over the five-year period, his creditors will receive more money.

Judge Lyster said the proposal for arrangement was approved by 73 per cent of the creditors by value on November 25th. It is understood two of the larger creditors accepted the arrangement, two rejected it, one creditor abstained and one, a family member, could not vote under the rules.

In what was a short hearing, the judge said the paperwork was in order and he was satisfied to grant the application.

The man's name will now be placed on a register held by the Insolvency Service of Ireland. At the end of the term, he will be discharged from his debts and his name will be removed from the register.