Woman (59) has €3.6m debt written off for €3,000 payment under personal insolvency deal

A secretary has secured High Court approval for a personal insolvency arrangement (PIA) which involves some €3.6 million of her total €4.16 million debts being written off for a payment of €3,000.

Under the terms of the PIA, Mars Capital Finance Ireland DAC, a secured creditor of Winifred Swaine (59), will be paid its total debt of some €404,000.

Everyday Finance Ireland DAC, a secured creditor owed €1.8 million under a judgment mortgage, had that debt treated as an unsecured liability. It will get €1,816 under a dividend plus a lump sum payment of €72,000 from Ms Swaine’s former husband.

Everyday and two unsecured creditors, Bank of Ireland and Pepper Corporation, were owed a total €3.6 million and all three had voted against the PIA, under which they will be paid a total €3,000 between them in dividends.

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Essentially, some €3.6 million of the debt was written off in exchange for €3,000, said barrister Keith Farry, instructed by solicitor Nicola Nevin, when moving the application by Tom Murray, Ms Swaine’s Personal Insolvency Practitioner, for approval of the arrangement.

Retains residence

Under the PIA, Ms Swaine will retain her principal private residence at Knocknacarra Road, Salthill, Co Galway and her ex-husband Owen Swaine, from whom she is separated, will pay €200,000 of a mortgage debt of €404,321 of Ms Swaine’s on which Mars has a first charge.

That payment is to be made within 12 weeks of the effective date of the PIA, which is a six month arrangement. Ms Swaine will make payments of €204,321 concerning the balance of the mortgage over a period of ten years.

Owen Swaine will make a lump sum payment of €72,000 to Everyday in respect of her €1.8m liability to that entity under a judgment mortgage on which Everyday held a second charge. The balance of Everyday’s debt, some €1.74m, will be treated as an unsecured liability and subject to a dividend of €1,417.

Two other unsecured creditors, Bank of Ireland, owed €1.77m under a mortgage and Pepper Finance Corporation DAC, owed €172,601 under a mortgage will get dividends of €1,442 and €140 respectively.

Ms Swaine, counsel said, was married to Owen Swaine, a solicitor in Galway, and a secretary in Swaine Solicitors. The couple had separated but Ms Swaine was relying on her former husband to provide certain funding for the PIA, Mr Farry said.

He said the principal private residence in Galway, which Ms Swaine owns with her former husband, has a value of €530,000 and the mortgage was some €404,000.

Lump sum payment

Mr Swaine was to make a lump sum payment of €200,000 towards that, the mortgage term was being extended to 120 months and Ms Swaine was to make monthly payments of €1,900. To assist her in that regard, she rents a room to students, he said.

Everyday’s debt of €1.8 million was secured against 50 per cent of the house, he said. Mr Swaine was to pay €72,000 to Everyday, which was about 50 per cent of its equity in the house and amounted to what it would get it the debt was sold.

Ms Swaine was to make a lump sum contribution of €9,150 which, after the PIP fee of €6,150 was paid, left some €3,000 dividends for unsecured creditors.

In court documents, Ms Swaine’s total net monthly income was put at €1,845.

Confirming the PIA, the judge said its terms were in line with the relevant law and there was a reasonable prospect the court’s confirmation of it would enable Ms Swaine to resolve her debts without recourse to bankruptcy, enable her creditors to recover some of their debt and enable her to occupy all or part of her private residence.

It seemed Ms Swaine was reasonably likely to comply with terms of the six month arrangement, he said, noting she is getting funds from Mr Swaine. The cost of enabling her to remain in the private residence was not “disproportionately large”, he added.