The bankruptcy of a couple, who claim they were misled by a financial adviser and should never have been declared bankrupt in the first place, has been annulled.
In the first case of its kind since new bankruptcy laws came in to being, Ms Justice Caroline Costello at the High Court yesterday made orders annulling the bankruptcy of Martin Byrne and his wife Catherine White Byrne.
Earlier this year, the couple, from Knocknaveigh, Virginia, Co Cavan, were adjudicated as bankrupt by the High Court after being advised to do so by a financial advisor they consulted.
Yesterday the couple’s lawyer said they should never have been adjudicated bankrupt as there was a viable alternative which they claim they were not informed of by their adviser, who they said misled them.
Solicitor Bill Holohan said last year the couple sought advice in relation to their financial difficulties. Their priority was to keep their home where they reside with their three children.
They met with and sought advice from the financial adviser, who they said is a bankruptcy expert.
Mr Holohan said the couple were informed and led to believe by the adviser all their proposals to their creditors to restructure their debts had been rejected. They believed, and based on the advice they were given, they had no option other than to go bankrupt.
However, following consultations with officials of the Insolvency Service, a PIP report advised them they could have done a personal insolvency arrangement with their creditors instead of seeking bankruptcy.
Ms Justice Costello said she was satisfied given the facts of the case to annul the Byrnes’ bankruptcy.
The ruling was welcomed by David Hall of the Irish Mortgage Holders Organisation, which had supported the Byrnes’ application. Mr Hall called on the Insolvency Service and the Central Bank to put in place a proper consumer protection for debtors going through bankruptcy.
Speaking outside court, he added: “While this is the first application of its type to come before the court, there are a number of other people in the same situation as the Byrnes whose cases have yet to be heard.”
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