A BANK which overcharged interest to a mortgage holder who later was declared bankrupt has consented to him being discharged from his bankruptcy, the High Court heard.
Joseph Wallace, adjudicated a bankrupt in March 2014, claimed he would not have had to go bankrupt if he had not been overcharged.
He applied for bankruptcy after being unable to meet repayments on him home at Castle Close, Mahon, Cork, on a mortgage with Permanent TSB. He says he only learned of the overcharging after becoming bankrupt.
On Monday, Ms Justice Caroline Costello formally discharged him from his bankruptcy.
The outstanding mortgage at the time of the bankruptcy was some €326,000 with €75,000 arrears, Mr Wallace’s counsel told the court.
However, counsel said, the actual amount, had there not been an overcharge, was around €284,000 with €52,000 arrears.
He was charged interest at a rate of 4.5 per cent when he was entitled to 1.5 per cent, counsel said.
The bank, in a letter, explained this was the result of him having been switched from a tracker mortgage to a standard rate mortgage which occurred because there had been a break in the tracker and which meant he lost his entitlement to continue it, counsel said.
However, the bank accepted it should have informed him of this and did not do so, the letter stated.
On this basis, Mr Wallace was applying for a discharge from his bankruptcy.
Mr Wallace had gone through a difficult time, having separated from his partner and lost his family home, counsel said.
Ms Justice Costello noted the bank and the official assignee, who administered the bankruptcy, had consented to the discharge and said she she was happy to make the order.
David Hall of the Irish Mortgage Holders Association welcomed the judge's decision in what he said was the first case of this type before the courts.
His association was in discussions on behalf of a number of other people in similar situations and their cases were pending, Mr Hall said.
