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We've got 60k left on a mortgage, but home equity line is used up at 150k. about 30k in cc debt. Barely making it. Making the payments on time, but barely over the minimum.

If we file for bankruptcy will we lose the house? What would you recommend? Thanks.

Essentially I used the HELOC as an ATM card. Didn't help that I used thousands of it for a gambling habit which thankfully I've gotten over. Haven't gambled in a year.




Congratulations on recovering from the gambling addiction. The bankruptcy laws are stricter know and you have to pass a means test. If you file a Chapter 13 that should protect your home. I would suggest that you sign up for the free debt consult available here either online or calling the toll-free number and they will be better ablet to advise you.

There are numerous members on this site and will be able to offer suggestions for you. Good luck to you.

Sub: #1 posted on Thu, 07/24/2008 - 00:26

ladybug ladybug

(Posts: 2757 | Credits: 282.45)

the only way to keep the house and file chapter 7 is to reaffirm
that debt during the meeting of creditors.otherwise chapter 13
or as ladybug advises,you can get a debt consultation here.

Sub: #2 posted on Thu, 07/24/2008 - 00:29

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15506 | Credits: 1356.56)

Can I just reaffirm the mortgage and not the HELOC?

Sub: #3 posted on Thu, 07/24/2008 - 01:13

Unregistered


you will have to reaffirm both,forgot about the HELOC.

Sub: #4 posted on Thu, 07/24/2008 - 01:16

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15506 | Credits: 1356.56)

So essentially I'm stuck.

Sub: #5 posted on Thu, 07/24/2008 - 01:41

Unregistered


Actually, I just filed for Chapter 7 a couple of weeks ago, and our attorney advised that "we never reaffirm." Since our mortgages are higher than the value in our house, she said that if we don't reaffirm, and then something else happens later and we lose the house, then the mortgage company can't get a deficiency judgment against us (I think for the amount that is currently considered "unsecured" since there is not that value in the property). She did say that if we don't reaffirm, then the mortgage company may refuse to send monthly statements to us.

However, whether you reaffirm or not, you would need to keep both mortgage payments current or you would risk losing your house. If you file Chapter 7, as long as your mortgage payments are current and you keep them current, you would be able to keep your house. My attorney told us that if we filed Chapter 13, then we would have to make structured payments to our creditors, including the HELOC, for five years, but at the end of that 5 years, the balance of the HELOC would be discharged also. However, I believe that was only because our house is worth less than what we owe on our first mortgage. In your case, since you only owe 60K on your first mortgage, your house is probably worth more than that. Which pretty much brings you back to having to continue to pay both mortgages, I would think, if you want to keep your house.

Sub: #6 posted on Thu, 07/24/2008 - 01:45

alias1958 alias1958

(Posts: 1230 | Credits: 79.88)

if you are leaning towards bankruptcy and want to keep the
house,i'm afraid you are.there is no other way.either declare
chapter 7 and reaffirm those two debts or chapter 13.

Sub: #7 posted on Thu, 07/24/2008 - 01:46

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15506 | Credits: 1356.56)

I should have said that you would be able to keep your house in a Chapter 7 as long as your equity in it does not exceed your allowed exemptions. You would have to check your state exemptions to be sure. There are also federal exemptions, and I believe some states allow you to use either state or federal.

Sub: #8 posted on Thu, 07/24/2008 - 01:48

alias1958 alias1958

(Posts: 1230 | Credits: 79.88)

i was trying to edit myself,it would depend on the value,amount
owed on the house,but i was told that any property still owed
on would have to be reaffirmed,that is why i chose not to file.
this was from a BK attorney in IL.i noticed some lawyers will
go about things like that differently.

Sub: #9 posted on Thu, 07/24/2008 - 01:53

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15506 | Credits: 1356.56)

Not worth filing a bankruptcy if we can't get the HELOC off of it. So basically sell the house or surrender it pretty much is the consensus here. Am I correct?

Sub: #10 posted on Thu, 07/24/2008 - 01:55

Unregistered


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