Ronan Ryan and Pamela Flood’s legal win shows strength of insolvency system

Home / Press Coverage / Ronan Ryan and Pamela Flood’s legal win shows strength of insolvency system

When it comes to the family home Ireland has probably the world’s strongest and most citizen-friendly insolvency laws. This is a direct result of our common belief in the sanctity of the home.

This is reflected in the Constitution, where the dwelling of every citizen is said to be “inviolable”. This is the highest law of the land declaring that nobody can enter your home except in accordance with law.

There is, of course, a balance to be struck.

When somebody borrows from a bank and pledges their home as security for the debt by way of a mortgage, they are, in effect, promising to hand over the property if they default on the loan.

A strict application of this promise would have meant tens of thousands of people vacating their homes at a time when the economy was in free-fall and unemployment was rampant. It would have added special injury to many self-employed people and owners of small businesses across the country who were not protected by the security of holding permanent State jobs.

Loopholes

When I co-founded New Beginning in 2010, we deliberately sought to frustrate the system by finding loopholes in the law to create time and space for economic recovery to occur and for new laws to be implemented to deal with mortgage arrears.

The new laws enacted in 2013 and subsequently amended give borrowers the best chance to rehabilitate their circumstances. This is about looking forward, not about looking back.

For people such as Ryan and Flood there was now the opportunity to use their obvious talents to dig themselves out of the hole of debt

Yesterday’s High Court decision in the case involving Ronan Ryan and Pamela Flood is an important milestone in the legislation and shows how the law can and should work.

Ryan was offered a deal by his bank in 2013 in the form of “fight or flight”. If he was willing to sell his home the bank would take the proceeds in full and final settlement. Over the years he sought to sell the home on numerous occasions but each time the bank asked that he hold back – presumably because property prices were increasing.

Pamela Flood at home in Clontarf, Dublin. File photograph: Dave Meehan

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