Divorce can place enormous financial pressure on homeowners. When mortgage repayments become unmanageable, arrears can escalate quickly and the risk to your home becomes very real.
In this anonymised case study, we explain how a Personal Insolvency Arrangement (PIA) helped our client significantly reduce their mortgage arrears and regain financial stability.
The Financial Situation
Our client was employed in retail management and owned her principal private residence. Following her separation, mortgage arrears had grown to more than €80,000 on a tracker mortgage.
Efforts to agree a voluntary mortgage restructure were unsuccessful due to complications involving the joint mortgage holder. As a result, the arrears continued to increase and monthly repayments had become unsustainable.
In addition to the mortgage arrears, there were:
- Unsecured debts, including Revenue liabilities
- A hire purchase agreement requiring ongoing monthly payments
She was deeply concerned about the possibility of losing her home.
Why Mortgage Restructuring Is Not Always Enough
Many homeowners assume that a lender will automatically agree to restructure a mortgage after divorce. However, where a mortgage is held jointly and one party does not engage, lenders may refuse to proceed with a standard restructure.
This can leave borrowers feeling trapped.
In situations like this, a PIA can provide a formal legal framework to deal with both secured and unsecured debt.
The Personal Insolvency Arrangement
After a full financial review, a Personal Insolvency Arrangement was proposed and approved.
The outcome included:
- A substantial reduction in the mortgage balance
- A secured debt write-off of tens of thousands of euro
- A reduction in mortgage repayments of over €700/pm
- Retention of the tracker interest rate
- Unsecured debts discharged in full on completion of the PIA
- Hire purchase agreement maintained
The arrangement made the mortgage sustainable and protected the client’s principal private residence.
The Human Impact
Financial restructuring is not only about numbers. It is about clarity, stability and support during a stressful time.
The client later shared some positive feedback about how the PIA changed her situation for the better:
“”I could tell that the team genuinely cared about the outcome… …I am eternally thankful. If I could give more stars I would!”
Can a PIA Help After Divorce?
If you are experiencing mortgage arrears after divorce or separation in Ireland, you may have more options than you realise.
A PIA could:
- Reduce secured mortgage debt
- Write off unsecured debts
- Protect your family home
- Create affordable monthly repayments
- Provide legal protection from creditor action
Every situation is different. Professional advice is essential to determine the right solution.
Speak to a Personal Insolvency Practitioner
If you are worried about mortgage arrears or struggling with debt following a relationship breakdown, early advice can make a significant difference.
Contact our team today for a confidential consultation to explore whether a Personal Insolvency Arrangement is suitable for your circumstances.
Please note:
Some client details have been anonymised to protect privacy. Outcomes vary depending on individual circumstances.
