TRIM CIRCUIT COURT has issued the first protective certificate in an insolvency case involving mortgage debt under the new system.
The family, which has borrowings in excess of €600,000, was given 70 days protection from its seven creditors. During those 70 days, no legal action can be taken or progressed against the debtor.
The personal insolvency practitioner in the case, Mitchell O’Brien, will now negotiate with the creditors.
Speaking to TheJournal.ie this morning, the Dungarvan-based PIP said he would look to strike a sustainable resolution of the family’s debts, seeking to protect the family home, a reasonable standard of living and the tools of their trade.
Any proposal made by O’Brien is subject to the majority approval (65 per cent) of the creditors.
“While considering the agreement,” he explained, “creditors are comparing it to what they would get in bankruptcy.”
It is likely that the solution will involve some write down of mortgage debt.
Although this is the first insolvency case involving mortgage debt, it is not a rare case. O’Brien’s firm alone has 23 in the system with the insolvency service and another 140 clients at various stages of the process.
He believes the biggest issue for the new insolvency arrangements will be the capacity of the PIPs to deal with demand.
A meeting of the practitioners is taking place in Portlaoise today as they try to “work out ways to deliver the best service”.
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