Mr Wallace was adjudicated a bankrupt at the High Court on foot of a €2m judgement debt in a 10-minute hearing.
He said there has been an agenda to drive him into bankruptcy by US fund giant Cerberus, which he has severely criticised in the Dáil over its role in the sale of Nama’s Northern Ireland loan book.
Mr Wallace is now in a fight to keep his family home in Fairview in Dublin, which he said was his sole remaining property out of 76 he once owned.
Speaking to the Irish Examiner, he admitted he was not sure if he would keep the house, but revealed he has lost homes in Dublin, Wexford and Italy.
It also emerged that Mr Wallace has failed to pay any money to Revenue arising from a tax settlement in 2012, when he admitted to having knowingly made a false Vat declaration. He said he did so to save his company and expected to be able to pay the money due at a later date.
“I’m actually not paying back the revenue at all because I don’t have the means to do so. I was never directly paying back the revenue,” he said.
In court, Ms Justice Caroline Costello granted the bankruptcy petition by the Promontoria (Aran) Ltd fund arising from a €2m judgement obtained after the fund took over a debt owed to Ulster Bank.
That judgement was granted by the Commercial Court last January arising from Mr Wallace’s liability to Ulster Bank under his guarantee of the debt of his company, M & J Wallace Ltd.
Promontoria is owned by US fund giant Cerberus, the fund at the centre of allegations made in the Dáil by the TD concerning the acquisition of Nama’s €5.7bn Northern Ireland portfolio.
Mr Wallace said Cerberus had an agenda to ensure he was made bankrupt.
“Cerberus have bought over €20bn of assets and involves thousands of debtors and I am the first one it has bankrupted. They used the power of a €2m personal guarantee to bankrupt me. But it is clear to anyone there is an agenda here,” he told the Irish Examiner.
Until the law changed in 2014, a TD would automatically lose their seat if declared bankrupt but that is no longer the position.
In relation to the bankruptcy, Mr Wallace said his Dáil salary will be subject to a charge for three years. “They have the right to take my wages for three years and give me something to live on, the bankruptcy lasts for one year but then they have the right to take my wages for three,” he said.
Asked if his false declaration was wrong, he said: “Yeah, it is yeah, but there’s a fair lot of worse things going on in business at the moment. And do you know what, do you know what’s a lot worse, this State has lost 1.3m [euro] over not being able to return my Vat, this State has lost in my opinion at least 20bn [euro] from the way Nama have operated.”