Use of HELOC just prior to filing

[AreSoonParted]

Hello All,
I had been planning on a 13, but due to the family member over 4 limit being raised from 6300 to 6900, AND a payraise due 4/1 that was put on hold indefinitely I am going to strike while I'm about $500 a month under median income. Anyhow, my pre-planning is all messed up and my cashflow shows I will be about 600 short in mid-June. I'm planning on reaffirming my HELOC and am wondering if I draw about 600 out on Monday(5/14) and buy groceries/gas/and other essentials is there any way that can get me in trouble??? Haven't heard back from Atty yet, but wondering if anyone else has done this.
All my debt is unsecured. I am current on my mortgage and HELOC.

Thanks

[lrprn]

...am wondering if I draw about 600 out on Monday(5/14) and buy groceries/gas/and other essentials is there any way that can get me in trouble???

Before you borrow against your HELOC, be sure to clear it with your lawyer.

Since you've retained a lawyer, it's obvious that you intend to file bankrupcy. Borrowing against your HELOC right before you file could look like you are borrowing without an intent to pay the debt, although reaffirming willl help allay that suspicion. You don't want to give your trustee any grounds that your filing is fraudulent. Get the ok with your lawyer first.

[hopefulrelief]

Hi,
Check with your attorney but I will lend our experience. We used our heloc to put new tires on our car and to...LOL...pay part of our attny fees! He laughed when we asked him for advice on drawing off of that when he knew thats how he was getting his $ but said it shouldn't be a problem. We obviously were reaffirming. They sent us the reaff papers several weeks ago and we have not heard a peep! I would again get your attn opinion but it was OK here!
HR

[keptdigging]

Yes check with your attorney, but I think this is fine because
(1) You are reaffirming -- so not asking for a discharge anyway.
(2) It is only $600. That hardly seems grounds to deem your filing abusive.

But that begs another question: Why are you reaffirming?

If you didn't reaffirm then the $600 is potentially non-dischargeable. But it's only $600, and you're going to be paying the HELOC anyway.

The pros/cons of reaffirming a mortgage is a whole 'nuther topic.

In my case I was current on both at filing, and plan to keep the house and keep paying. My lawyer even had me check the "intention" to reaffirm. But I am absolutely not reaffirming. If things take another turn for the worse, the mortgage holders will only be able to collect from the property, not from me personally.

[tcreegan]

Hello AreSoonParted,

Do you have enought equity in the 1st to cover the 2nd?

Without equity in the 1st, when you file BK the 2nd becomes worthless and can be settled pennies on the dollar.

If this is the case, stop paying on the 2nd and use that $ for food, gas, lawyer, etc.

If not, sorry to be flapping my gums....

Tom in Colo

[keptdigging]

To chime in on what Tom in Colo said... a 2nd is a lot more worthless if you don't reaffirm.

I'd borrow the $600 if I needed it for necessities and just be prepared to stipulate that the $600 was non-dischargeable.

But, as always, I am not your attorney. I'm not an attorney at all...

[ccsjoe]

Hey kept and Tom, you did notice you are responding to a 3 year old thread?

[keptdigging]

Wow. My bad. How did I miss that?

[scorpion35]

anyone that uses credit right before filling is commiting fraud as far as i know

[tcreegan]

Good call Joe, totally missed that!

I am not 100% convinced the website is stable yet, I get bumped off my login at seemingly random times....

Tom in Colo