Man discharged early from bankruptcy after bank overcharged him on mortgage

A man who lost his home and was declared bankrupt after being overcharged on his mortgage is considering legal action against his bank after a landmark High Court decision.

Joseph Wallace, of 5 Castle Close, Mahon, Cork, was discharged from bankruptcy early by the court yesterday. It was the first case of its kind where someone forced into bankruptcy was discharged arising out of the tracker mortgage review process.

Solicitor Alan McGee said his client is considering legal options, including a possible civil case against his sole creditor, Permanent TSB. Mr Wallace’s debt arose after he borrowed money to buy a family home in Carrigaline, Co Cork, in 2007.

He originally had a tracker mortgage with PTSB but he opted to fix his mortgage rate. However, at the end of the fixed-rate term, the bank would not allow him back onto a tracker mortgage. The tracker rate at the time was 1.15%, but Mr Wallace was kept on the higher variable rate of 4.5%, and was unable to meet the repayments.

The High Court was told yesterday that the resultant pressure exerted by PTSB forced Mr Wallace into bankruptcy, contributed to the breakdown of his relationship with his partner, caused him to lose his home, and caused ill-health.

He was adjudicated a bankrupt on March 11, 2014. The only debt in his bankruptcy were the debts with his sole creditor, PTSB.

However, on August 4 2015, the bank wrote to Mr Wallace admitting he had been overcharged.

Mr Wallace satisfied the court yesterday if he had not been overcharged, he would not have been in the same difficulty and may not have needed to go bankrupt.


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