BAC HELOC shows 0 balance after BK7?

[indeep59]

BAC HELOC shows 0 balance after BK7?

Just looked online at my BAC accounts and this HELOC on my home shows a 0 balance and no past due amount (8 months behind), and no future payment due.

I did include this in the bankruptcy but what happens next?

I never received any collection letters, just a few "can we help" offers a few months ago.
Not sure if it was charged off or what happened?
It is underwater,45k heloc, 163k first mortgage, total value approximately 120k.

[IBroke]

BAC HELOC shows 0 balance after BK7?

Just looked online at my BAC accounts and this HELOC on my home shows a 0 balance and no past due amount (8 months behind), and no future payment due.

I did include this in the bankruptcy but what happens next?

I never received any collection letters, just a few "can we help" offers a few months ago.
Not sure if it was charged off or what happened?
It is underwater,45k heloc, 163k first mortgage, total value approximately 120k.

Did you reaffirm? If not, they are not allowed to report future payments and balances because it was included in Bankruptcy - so the standard reporting for IIB-accounts applies.

[indeep59]

I see.
What happens though to the debt? Charge off, foreclosure,etc?
Will they try to contact me to settle it?

[IBroke]

I see.
What happens though to the debt? Charge off, foreclosure,etc?
Will they try to contact me to settle it?

PERSONALLY, you are not liable for the debt any more. However, it is still "attached" to your house/lien. If you owe more on the first than what the property is worth, your Chapter 7 makes a foreclosure even less likely - they can't collect from the foreclosure and they can't collect from you because it is discharged - However, they would have to pay the first lien holder the entire amount owed on the first mortgage.

A settlement might be a good solution if you intend to keep the home. Due to the discharge, the lien might only have a "paper-value" if you are underwater on the house and they might be willing to settle for pennies on the Dollar.

I have to ask if the HELOC is your only "mortgage" though...if you don't have a first mortgage, BAC is in a better position to foreclose.

[tcreegan]

Hi indeep59,

I see.
What happens though to the debt? Charge off, foreclosure,etc?
Will they try to contact me to settle it?

It was discharged in the BK. So your zero balance is correct (and make sure that is what your credit report shows too)

It survives the BK as a lien on the house, second to the first mortgage.

If the house is underwater, the second is essentially worthless. Which is why they will usually settle for pennies on the dollar.

You have to contact them. If they ask you, it could be a violation of BK rules and they could be fined.

Of course this is assuming you are keeping the house...

Congrats on the discharge,

Tom in Colo

[indeep59]

PERSONALLY, you are not liable for the debt any more. However, it is still "attached" to your house/lien. If you owe more on the first than what the property is worth, your Chapter 7 makes a foreclosure even less likely - they can't collect from the foreclosure and they can't collect from you because it is discharged - However, they would have to pay the first lien holder the entire amount owed on the first mortgage.

A settlement might be a good solution if you intend to keep the home. Due to the discharge, the lien might only have a "paper-value" if you are underwater on the house and they might be willing to settle for pennies on the Dollar.

I have to ask if the HELOC is your only "mortgage" though...if you don't have a first mortgage, BAC is in a better position to foreclose.

No the heloc is not the only mortgage,I have a first too. It's definitely underwater, 210k in mortgages, 120-150 BEST case scenario, more likely 90k..

[indeep59]

Hi indeep59,

I see.
What happens though to the debt? Charge off, foreclosure,etc?
Will they try to contact me to settle it?

It was discharged in the BK. So your zero balance is correct (and make sure that is what your credit report shows too)

It survives the BK as a lien on the house, second to the first mortgage.

If the house is underwater, the second is essentially worthless. Which is why they will usually settle for pennies on the dollar.

You have to contact them. If they ask you, it could be a violation of BK rules and they could be fined.

Of course this is assuming you are keeping the house...

Congrats on the discharge,

Tom in Colo

Thanks.
The only way I'm keeping it is the first mortgage has to modify, and they are not being very cooperative. (Astoria Federal)
They've already served me with a foreclosure summons that I've responded to. We'll see what happens.

[spidge]

So if a house is so far under water that it will take say ten years for the value to equal the balance on the first one could file a ch7 and settle on the side or file a ch13 after four years of the ch7 discharge? It would be a ch20 but if one waits after the four years is it OK. This way after the ch7 one may be able to save up enough to settle considering no longer paying the 2nd and relief from other obligations.

If you want to respond with "Why would you want to save the house under those circumstances?" just don't.