For those people entering into a Personal Insolvency Arrangement under the Personal Insolvency Act 2012, a major concern will be whether they will be allowed to continue to live in their family home or what is called their principal private residence under the Act.
Provision has been made in the law stating that the Personal Insolvency Practitioner, who assists those in financial difficulty when making the proposals to deal with debt, in so far as reasonably practicable will make sure that people are not asked to sell or move out of their principal private residence without their agreement.
If you wish to move out of your home or the Personal Insolvency Practitioner believes that the running costs of staying in the principal private residence are disproportionately large, any Personal Insolvency Arrangement entered into may provide that you sell your home.
In deciding whether the cost of the principal private residence is disproportionate, the Personal Insolvency Practitioner will consider reasonable living expenses and what is reasonable and sustainable accommodation expenditure in an individual case.
Factors which will be relevant include:
• Costs relevant to stay in the current residence;
• Ability of others living in the residence to contribute to accommodation costs;
• Reasonable living accommodation needs of the debtor and their spouse and children (size of house, number of dependants, special needs and circumstances)
• Cost of alternative accommodation with reference to the housing market and other relevant data
– a legal briefing from Kilkenny Solicitors Holland Condon