Inquiry: BoA HELOC Forgiveness during BK13

[rjl0206]

To all,


In the middle of finally converting BK13 to BK7 (official this Monday Oct.8th), BK 13 included Heloc of 32k from BoA. Today I receive a letter via Fed Ex from BoA stating full principal forgiveness of HELOC with no mention of Lien release whatsoever. Will I take a Tax hit this coming year because of the Heloc forgiveness? I am NOT discharged from BK 13 and IF I get discharged through a successful conversion 7, I wont find out until February IF everything goes accordingly.

In said on the leeter also though that I DO NOT have to accept this forgiveness by calling them back within 30 days. I will speak with my lawyer again tomm. about this but would just like to get some feedback from you guys as to what my options are. My take i that we will be letting the house go to forclosure more than likely but if this means I can get the Lien removed I may just go ahead and try to salvage a modification after discharge if possible. Thanks all.

[spidge]

Chomping at the bit.

First off, good for you. I do have a couple questions though.
Did you received this letter directly from BofA, or did your attorney? I ask, because all my billing addressees were changed to my attorney's so I may not see it.
How long did you go without paying the 2nd?
Did you have to get the ball rolling on this or were you simply on the list?

Again, congrats.

[spidge]

Another question I have is that when I called the number to check on the DOJ settlement the first thing they say is that they are a collection department. So I thanked them and hung up as I do not want to open a can of worms without the attorney having been involved. Was this wise or should I just go ahead with the call? Would contacting them directly cause an issue with my BK13?

[rjl0206]

Hey,

I received this letter today from BoA. I have not paid my Heloc since 2009, never called or anything like that as I went with a BK13 for a lien Strip.

[walkthaplank]

I got the same thing today. I converted my CH13 to a 7, and my discharge should be any day now. I haven't paid my 2nd since 2009. I am assuming that they are releasing their lien on the property since they are "forgiving" the debt. Of course, I guess time will tell.

To the OP, since you filed BK prior to the forgiveness, you should have no tax consequences as a result of this forgiveness.

[rjl0206]

Even without receiving a discharge yet? Thanks. Also how did you 341 go? Did UST ask you anything? Thanks

[walkthaplank]

My CH7 341 was 5 or 6 questions and out. UST wasn't even there. You filed for BK protection prior to the forgiveness, the filing is what freezes everything, the discharge just finalizes everything prior to closing.

As to the BofA forgiveness, I found this. http://newsroom.bankofamerica.com/pr...ebt-extinguish

As part of Bank of America’s ongoing efforts to help customers in need of mortgage assistance, this company is in the process of mailing approximately 150,000 letters to pre-qualified homeowners offering automatic extinguishment of their second lien mortgages. The intention of the program is to place homeowners in an improved financial situation by reducing their monthly debt obligations and, potentially, help them create equity in their property.

The full forgiveness of second lien balances on eligible loans is being extended under Bank of America’s participation in the 2012 national mortgage settlement among the five largest mortgage servicers, 49 state attorneys general and the federal government.

Letters that began mailing in July 2012 and continue through the end of this year inform predetermined eligible homeowners that the full balance of their Bank of America-owned and -serviced second lien mortgage will be forgiven and the bank’s lien on the collateral property will be released free and clear, unless the customer opts out of this relief offer within 30 days of receiving the letter.

[rjl0206]

Thanks! Lastly do I have to do another bk counseling thing online like I did prior to ch13? Thanks.

[walkthaplank]

yes, there are pre-filing and pre-discharge classes that you are required to complete. The pre-filing class you should have done prior to the CH13 filing so you should only have to take the pre-discharge class.

[rjl0206]

cool beans thanks!. So just the Pre-discharge needs to be done. How do I find the website etc? Or will my lawyer tell me once 341 is done with?

[walkthaplank]

NO!! Have the pre-discharge class done before you walk in for the 341. When I had mine, the trustee was telling the few people who hadn't had it that they needed to submit the certificate within 24 hours. He seemed very testy on the subject like it was a pet peeve. It might just be a local thing, but why take the chance.

http://www.justice.gov/ust/eo/bapcpa...e_approved.htm

Select your state to find an approved course. They are available online and are fairly inexpensive. I don't remember what I spent on mine. Just have it done prior to the 341.

[spidge]

Another question I have is that when I called the number to check on the DOJ settlement the first thing they say is that they are a collection department. So I thanked them and hung up as I do not want to open a can of worms without the attorney having been involved. Was this wise or should I just go ahead with the call? Would contacting them directly cause an issue with my BK13?

SO even though they describe themselves as a collection department, could I speak to them without effecting my ch13?