Pensioner faced mortgage payments until she was 98 under proposed deal

A High Court judge has refused to approve a pensioner’s Personal insolvency Arrangement which would have seen her continue to make mortgage repayments on her home till she was 98 years of age.

The ruling was made in a Limerick appeal in what is being regarded as a key test case.

Mr Justice Mark Sanfey dismissed the application after finding that 69-year-old Ann Fennell, who owes Ulster Bank €72,500, would not be reasonably likely to be able to comply with the terms of the proposed PIA.

The bank opposed the PIA, which proposed to restructure the length of her mortgage repayments to a term of 348 months from the coming into effect of the proposed arrangement.

Insolvency arrangement

If the proposal was approved, Ms Fennell would be making monthly mortgage repayments until she was 98 years of age. She had entered into an insolvency arrangement over her difficulties in making payments to the bank.

In his judgment Mr Justice Sanfey, noting the bank’s opposition to the PIA, said the court was satisfied that such an arrangement where the term of the restructured loan is likely to exceed the life span of the debtor was not permissible under insolvency legislation.

He was not satisfied that Ms Fennell had demonstrated that the payments under the proposed PIA were affordable or sustainable.

Mr Justice Sanfey added his judgement may provide clarity on an issue, whether arrangements which provide for an extension of mortgage terms to a point where the debtor may not be alive, can be permitted by the courts.

This issue not only arose in Ms Fennell’s case, but also in what is understood to be dozens of other cases pending before the courts, the judge added.


The judge said that in his view the only way such an arrangement could be approved by a court was if the personal insolvency legislation was amended.

The primary aim of the restructuring of a mortgage term beyond the debtors lifetime, he said, is to ensure the affordability of the repayments and to secure the continued residence of the debt in their family home, he said.

The judge suggested that a discussion among affected parties to see if, or what time a solution to the type of problem faced by debtors such as Ms Fennell, should occur.

Under the proposed PIA Ms Fennell would have retained her four-bedroom home at Lyreadene Avenue, Woodview Park, Limerick, which is worth an estimated €180,000.

The PIA also proposed that she would make mortgage repayments of €57.47 for the first 24 months, rising to €238 per month from month 25 onwards until the debt to the bank had been settled.

There would be no write down of her debt, and should she die before the debt had been paid the PIA proposed that her estate, following the sale of her home, would pay the outstanding balance, the PIA further proposed.

The Circuit Court refused to approve Ms Fennell’s PIA, and that decision was appealed to the High Court.

Ms Fennell’s PIP, Maurice Lenihan, represented in the appeal by Keith Farry Bl urged the court to approve the PIA on grounds that the arrangement was workable, and that Ms Fennell would receive financial assistance to fund the PIA from her adult children.

The bank would also receive payments totally some €83,000 under the proposed PIA, it was argued.

Bank opposed arrangement

Ulster Bank, represented by Andrew Fitzpatrick SC and Nial O hUiginn Bl, opposed the PIA and the appeal on ground including that the proposal made by Ms Fennell’s Personal Insolvency practioner was unsustainable.

The costs of allowing Ms Fennell remain in her home, which she lives alone were disproportionately large, and said that it cannot be expected to accept PIA that amount to ‘lifetime mortgages.’

The court also heard that in an attempt to resolve her debt the bank offered Ms Fennell €15,000, to assist with relocation costs, on top of the €108,000 equity she has in the property if she left her home.

If that offered was accepted the bank proposed to sell the house. She refused that offer.

Social housing payments

In addition, the court heard that if Ms Fennell were to leave her home, the cost of rent, which would be supplemented by social housing payments, would be more that the cost of the proposed mortgage repayments.

In his decision the judge said he was not approving the PIA and dismissed the appeal, but urged the parties to continue to seek a workable resolution to resolve matters.

The judge, noting the willingness of Ms Fennell’s children to help their mother over her indebtedness, said he hoped that their goodwill could be used to generate concrete evidence-based proposals to enable her to stay in her home, where she is “settled happy and which holds so many memories for her.”

The case will return before the court at a later date for final orders.


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