The real estate debt of 1 million euros of an insurer canceled for only 891 euros

An insurance consultant has been granted a personal insolvency agreement (PIA) which will see nearly €1 million in debt canceled in return for a payment of just €891.

he High Court has approved the PIA for Gerard Conlon (41) after hearing that creditors had unanimously agreed to the arrangement despite the massive write-off involved.

The case is an illustration of the kind of bad home debts, dating back more than a decade before the economic crash of 2008, that are still before the courts.

Thanks to the debt agreement, Mr Conlon, of Cox’s Demesne, Dundalk, Co Louth, will obtain a restructured mortgage allowing him to save his family home.

The insurance consultant struggled financially after investing in property in his twenties, but it’s only now that his debts have been settled.

As part of the debt deal, Mr Conlon will get a new mortgage, paying off what he owes over 29 years.

He will pay the €170,000 owed on his mortgage to Pepper Asset Servicing, while his house is only worth €130,000.

Mr. Conlon will also dispose of an investment property in Dundalk.

However, more than €900,000 also owed by Mr Conlon to Pepper Asset Servicing in respect of real estate debts will be written off, as well as nearly €60,000 owed to the Revenue Commissioners. The court heard that the amounts written off were unsecured debts – loans or debts that were not backed by any collateral.

The unsecured creditors will end up sharing only €891.

Mr Conlon’s PIA, designed by personal insolvency specialist Alan Clarke, was approved by Judge Alexander Owens.

He was presented in court by attorney Keith Farry, representing the practitioner.

The court heard from Mr Conlon, a married father-of-one, who had total debts of more than 1.1 million euros.

The vast majority of these came after he acquired several properties between 2000 and 2008 as a co-borrower with a brother.

Property prices were extremely high at the time, but after the economic downturn values ​​plummeted and lending became unsustainable. Most of the properties have been repossessed, the court was told.

Mr Conlon ultimately owed Pepper Asset Servicing €909,000 in home loans and almost €85,000 to the Revenue Commissioners.

As well as being given the option to repay his mortgage debt in full, Mr Conlon will dispose of a second property, on York Street in Dundalk, worth €80,000, in full and final settlement of a debt owed thereon. this.

Only €25,900 of the €85,000 income debt is considered preferential, and it will be repaid over a 15-month period, the court heard. But the remaining sum of more than €59,000 will be almost entirely amortized.

Mr Farry said a lump sum of €8,891 had been collected from Mr Conlon’s friends and family for the PIA. But once the practitioner’s fees have been paid, there would only be €891 left for unsecured creditors.

“In total, around 1 million euros are canceled in exchange for 891 euros,” Mr Farry said.

The lawyer explained to the judge that all qualified creditors had voted in favor of the arrangement.

The court heard that secured creditors would receive 100% of what they were owed under the PIA, compared to just 69% in bankruptcy.

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John A. Bogar