A Meath farmer managed to save his land and renegotiate his debt, worth over €580,000, to so-called vulture funds Promontoria and Pepper Finance, through the use of a personal insolvency arrangement (PIA).

Gary Digney of PKF-FPM Accountants, Balbriggan, took on the case and said that Pepper Finance had a hold over 30ac of land and the farmhouse, while Promontoria held 35ac of land. There was a further €80,000 owed to creditors.

The farmer contacted Digney when Promontoria put the land up for sale in 2019 and he was then able to get a protected certificate to stop the sale and give the farmer a chance to put forward a proposal to repay his debt.

The unsecured creditors will be paid 80c on the euro over six years

A six-year PIA was ratified by the court in which the Pepper loan is serviced on an interest and part-capital basis with a tracker rate of 0.75% retained. The Promontoria loan is serviced on an interest and part capital arrangement with interest reduced from 5.45% to 3%.

The unsecured creditors will be paid 80c on the euro over six years.

After the PIA is finished, Pepper and Promontoria payments will revert to interest and full capital for a further 16 years.

Landmark ruling

Following a landmark ruling in the circuit court last June, there is an increase in farmers using PIAs to save their farms from being sold by so-called vulture funds.

Receivers are being appointed and a number of lands have been placed on the market for sale

Gary Digney said the majority are in relation to Everyday Finance from the 2019 AIB loan sale and Pepper. Receivers are being appointed and a number of lands have been placed on the market for sale.

Many farmers can feel frozen by the prospect of mounting debt, but in relation to vulture funds, Digney says time is of the essence and farmers should contact an experienced personal insolvency practitioner to help their situation.

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