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Timing of filing for foreclosure with HELOC

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    #1

    Timing of filing for foreclosure with HELOC

    Hi. My earlier post was way too long, so here is one of my questions. Appreciate your help. I'm in Georgia.

    We are going to foreclose in about 110 days (will be delinquent in 50 days).

    We have a $51,200 HELOC that was opened last Aug. or Sept. (at that time, we had no idea we would have to foreclose or even think about bankruptcy).

    It is with Wachovia (merged with Wells Fargo). They will charge it off. Therefore I don't know if they will sue us for deficiency, approach us to settle for much less, or sell it to a debt collection company.

    If we decide we have to do Chapter 7 (we do qualify), is it better to let the house foreclose first so the HELOC is charged off and then file? (We don't want to save the house. We are moving into a little fixer upper we bought 3.5 yrs. ago.

    After reading this forum, I'm hoping you say we should wait, as I realize we need to wait at least 6 months to file due to bank statement activity of removing large sums of cash for various reasons.

    This forum is awesome.
    Tags: chapter 7, charge off, heloc, timing
    #2
    It does not matter if a debt is chargedoff or not. You may include debts that are current in your bk-you don't have to be in default.

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      #3
      Need a little clarification

      Thank you for your reply. Does that mean we can wait until after the foreclosure is done to see which way things go before we file?

      Comment

        #4
        Not sure how I can make it any clearer. You can file anytime you please and the debt will be discharged.

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          #5
          I'd be more concerned with those bank withdraws for large sums of money.
          Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

          Comment

            #6
            OhioFiler has the right perspective on this one....

            Originally posted by questionsGA View Post
            ...
            We are going to foreclose in about 110 days (will be delinquent in 50 days).

            We have a $51,200 HELOC that was opened last Aug. or Sept. (at that time, we had no idea we would have to foreclose or even think about bankruptcy).
            ...
            (We don't want to save the house. We are moving into a little fixer upper we bought 3.5 yrs. ago....

            After reading this forum, I'm hoping you say we should wait, as I realize we need to wait at least 6 months to file due to bank statement activity of removing large sums of cash for various reasons.
            The lookback period is at least one year for cash advances and balance transfers. I know when I filed, I had to also provide all the financing information (notes and mortgages) within the 5 yrs immediately preceeding my BK filing. I am sure they were looking for HELOC's type transactions that you are describing.

            So you have a new HELOC taken out 7 or 8 months ago that you have not made payments on for the past 50 days, right? This will get the attention of the panel Trustee and possibly the UST. This is also a first year default and will receive scrutiny from the original lender.

            I would strongly consider paying the HELOC current and keeping it current at least through 12 months after funding. Wells Fargo may consider the loan to have been obtained thru fraud because it is a first year default. This could create issues in your BK where the loan is not dischargable. I am not trying to panic you. Better to research this aspect now and delay your filing for at least another 4 to 6 months. JMO
            Filed CH 7 9/30/2008
            Discharged Jan 5, 2009! Closed Jan 18, 2009
            I am not an attorney. None of my advice is legal advice in any way..

            Comment

              #7
              Look back for cash withdrawals

              Thank you for your help. The answers were truly valuable. We don't need to get into a worse situation than we are now. This forum is tremendous.

              Thanks again.

              Comment

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