Acceleratd Heloc and Chapter 13

[jjizzim]

I have a first and a second mortgage. My first mortgage is current and I was 4 months behind on the second due to loss of income. Income situation changed and i contacted the bank to bring the account current and was told that the account had been charged off and that they demanded payment in full ($120k) They would not negotiate a modification although i could bring the account current and make the payments.

My question is this. I've filed Chapter 13 to force them to accept the payments. I owe about $9700 in arrears. If they've accelerated the loan meaning that they will only accept the full amount, will the chapter 13 payment plan include the $9700 in arrears or will it have to include the entire amount of $120,000?

Also, since the loan has been "Charged off" and assuming the ch 13 plan only includes the arrears, what happens after the ch 13 is completed being that the bank has a policy to not reinstate charged off accounts??

[HHM]

The chapter 13 will act to reinstate the loan on its original terms provided you do 2 things.

1. Pay the arrears in the chapter 13
2. Start making your regular payment to the HELOC within the first 30 days of filing your chapter 13.

[chloe0724]

If you have filed a 13, have you done a lien strip of the second? If so, they will be forced to accept whatever amount you can afforded in your plan. If you are not planning a lien strip, the overdue amount will be put as secured debt and I think the bank has to reinstate the loan.

[jjizzim]

included

The chapter 13 will act to reinstate the loan on its original terms provided you do 2 things.

1. Pay the arrears in the chapter 13
2. Start making your regular payment to the HELOC within the first 30 days of filing your chapter 13.

The regular payments are included in the plan as well. The plan included the regular payments and the arreas along with the attorny's fees.

[jjizzim]

If you have filed a 13, have you done a lien strip of the second? If so, they will be forced to accept whatever amount you can afforded in your plan. If you are not planning a lien strip, the overdue amount will be put as secured debt and I think the bank has to reinstate the loan.

There's still equity in the home so I can't do a lien strip. Which is fine, I just don't want to be in a situation where after I complete the chapter 13 the bank says that the loan is still charged off and we want payment in full.

[krielly]

This may be a dumb question, but if the bank "charged off" the second, then does the second now become an "unsecured debt"???

K

[jjizzim]

I'm not an attorney, but I believe that the debt is still secured, meaning that they can foreclose on the property if I don't pay. It would be nice though if did though because then my lawyer could strip the debt, but because their is still equity in the property that can't be done.

This may be a dumb question, but if the bank "charged off" the second, then does the second now become an "unsecured debt"???

K

[HHM]

Charge off does not = unsecured.

It just means that the bank accepted it as a loss, but they can always reinstate.