@Anonymous wrote:
Hello, i recently was discharge from a chpt 7 two months ago. i have been current on my fixed and my heloc. I am + equity on the home about 70-90k and my heloc balance is 24k. I did not reaffirm either loan... if i can't pay on the HELOC, is there a possibility that the lender ( bank of america ) will work with me to settle the debt? Will they come after me because i have equity.
Thank you
is there a possibility that the lender ( bank of america ) will work with me to settle the debt?
I'd guess that would depend upon the amount that is going to be owed to the First and how much equity potentially in the home. The more equity there is, the less likely there is to be any kind of deal. I'm sure there are others with a more learned opinion on this.
Will they come after me because i have equity.
No and Yes.
When you were discharged under Chapter 7, that meant that your personal liability for any debt you listed was extinguished.
The First and Second mortgagees cannot come after you for any money period. Each are secured by a Mortgage Lien upon your home and can and now will enforce that Mortgage against the house, only.
Meaning that if the house were foreclosed upon and sold, they would take their money (amounts as established in the foreclosure action, and in which you would be named in to extinguish your rights) from whatever they house sold for at auction {NY foreclosure law requires Court intervention for a lender to sell a property and while the foreclosure proceedings are State Based (it can vary from state to state), the Bankruptcy Code is Federal (pretty much the same throughout the country)}.
1. Enough to pay the first, but not the second. The first gets paid, the second get nothing (no deficiency judgment).
2. Enough to pay the first and part of the second. The first gets paid, the second gets what's left and nothing more.
3. Enough to pay the first and second with some left over. The first gets paid, the second gets paid, you get what is leftover.
BUT: If you have a judgment against you now, and it was there prior to bankruptcy and you did not move to Avoid that lien or judgment {Bankruptcy Code §522(f)(1)(A)} that creditor will very likely look to get their share of any sale of the home. Depending upon when that judgment were entered, they might be able to take before the first, second and especially before you. BUT: even that judgment creditor can't come against you personally, but they can take all or part of your equity if that judgment/lien is not avoided in Court.
