KBC banks back down on $22,500 mortgage debt owed by Stephanie Meehan who recently went public over her partner’s suicide due to stresses surrounding their Prior Hall apartment.

The bank who wrote to Meehan seeking payment just days after she went public over, her fiance, Fiachra Daly’s suicide, said it “deeply regrets” the move.

Meehan recently went public saying she was convinced their dire financial situation was the reason her partner, a father-of-two, took his life. The family had been living in the uninhabitable Priory Hall apartment complex, until they were evicted.

The grieving partner appealed to the Irish government to act over the impossible situation financially vulnerable families had been put in.

She received one letter demanding a mortgage repayment and another highlighted the couple's $25,457 arrears plus interest on the mortgage for their apartment in Priory Hall. She said receiving the letters was like "a kick in the stomach."

Because of these arrears, the mother of two still owed €16,803.78 even after Fiachra's life insurance paid the balance after his death on July 14.

The couple's mortgage advisor, Michael Dowling, had written and telephoned KBC bank on August 12 to inform them of Fiachra's suicide, but a letter highlighting the couple's mounting mortgage arrears was sent to their home on August 14.

The bank has since said the letter was "regrettable," claiming it was automatically generated.

However, another letter, posted to their mortgage advisor, was sent on August 28, containing a statement of the couple's account and requesting a payment of €1,570.66 for September. The letter also stated that the life policy covered a sum of €295,300.68 but said that Meehan would still owe the outstanding balance of €16,803 and would continue to pay interest.

"I have to say I felt like somebody had kicked me in the stomach. I couldn't believe it," said Meehan. "I couldn't believe that they could be so unsympathetic... They know full well my circumstances, and also it wasn't necessary to send it at this time. Also to be threatening me with the added interest," she said.

"Where am I going to get that amount of money?"

Meehan generated a firestorm of publicity for the plight of Priory Hall residents, when she sent a letter to Taoiseach Enda Kenny about her partner's death and asked him to intervene in the Priory Hall apartments saga.

Last week, a senior manager at KBC contacted her mortgage adviser invited her to a meeting on Tuesday.

"It appears that they were concerned to know whether the letter had reached me," she said. "They have just rolled out this new current account and they are trying to promote this so I doubt they want the negative publicity."

The Irish Mortgage Holders Organisation has condemned the bank's letters, calling them "repulsive" and "despicable."

"They [KBC] were aware of Fiachra's death and, despite this, sent such an inhumane letter to both Stephanie and Fiachra. We are repeatedly told to engage and trust your bank. This shows the completely repulsive way they treat customers in such circumstances. How did any manager allow such a letter to issue given Fiachra's death and the massive publicity around Priory Hall?" it asked.

"KBC will likely be repaid in full for what is now a valueless property by Fiachra's insurance company. Yet the bank still wrote to Stephanie for an additional €19,000 they are charging her for arrears and interest."

KBC offered an acknowledgement of the Meehan's suffering in a publicly released statement:

"The defects and upheaval at the Priory Hall development have resulted in hardship, stress and devastation for many families and individuals. Any loss of life is a huge tragedy and we extend our sincere condolences to Stephanie Meehan and her family. We are working with all mortgage holders in a fair and consistent manner, including those affected by the Priory Hall situation, to find solutions. From the outset and throughout the Priory Hall situation we have made a freeze on loan repayments available to owner-occupier customers. For customers who don't avail of the freeze on loan repayments, the bank is obliged to issue correspondence in accordance with the Code of Conduct on Mortgage Arrears.

"The standard automated reminder letter (processed on 12th August and sent on 14th August) to all mortgage arrears customers was regrettably also issued in this case."

On Friday, Meehan made an appearance on The Late Late Show and criticized Kenny for failing to help the residents.

According to the Independent, Kenny refused to comment on the case and when asked for his reaction to Meehan's appearance, a spokesman said: "The Taoiseach outlined [last Wednesday] the Government's determination to arrive at a resolution."

Tanaiste Eamon Gilmore expressed his condolences to Sheehan after she sent him a copy of her letter to Kenny.

He wrote: "The death of Fiachra is deeply tragic and you have my very deepest sympathy in your loss. Unfortunately Priory Hall is a legacy of the boom and the inadequate regulations and oversight that pertained at that time. It now falls to Minister Phil Hogan to deal with the issue and the consequences for all those who bought homes in the complex."

Here Stephenie Meehan speaks out on "The Late Late Show":