Home Fair Market Value and Tax Lien

[PatG]

Here is our situation:

We are in the process of filing CH 13 in Texas and have a 1st and a Heloc. Our home is worth $140k, our first is $100k and the Heloc is $28k.
We also have a tax lien on the home for $68k due to back taxes.

Our attorney, who came highly recommended and has specialized in BK's for the last 25 years, thinks we can use the first and the tax lien to get the Heloc stripped.

Has anyone been through this scenario?

[LadyInTheRed]

I haven't. But if the IRS lien is senior to the HELOC, then the HELOC should be strippable.

[PatG]

I haven't. But if the IRS lien is senior to the HELOC, then the HELOC should be strippable.

The Heloc was in place before the lien, but i don't know which is considered senior.

[BKorbust]

The HELOC is senior because it was recorded before the IRS lien.

[LadyInTheRed]

I don't believe the IRS gets any kind of special treatment. I would ask your attorney how the HELOC can be stripped when the only senior lien is less than the value of the home.

[PatG]

I don't believe the IRS gets any kind of special treatment. I would ask your attorney how the HELOC can be stripped when the only senior lien is less than the value of the home.

I will be asking that question next time I meet with him.

[justbroke]

If your State uses negative noticing and the HELOC doesn't care about being stripped, your attorney's strategy could work. The problem is if the lien strip of the HELOC is contested (they object). The, as LITR suggests, it will get interesting as to the priority of the three liens.

[PatG]

Thanks for all the responses. I'm glad I can finally post on here, everyone sure helps to make what we are going through a little easier.

I'll let you know what I find out. We are probably going to file before the end of the year.

[PatG]

It doesn't look like the HELOC will be stripped, but it will be paid off in the plan.

341 meeting in the morning, I hope it goes well.

Will report back after the meeting.