HELOC shows discharged in BK

[vleisme]

We were discharged in Aug 2008 and the mortgage holder did not want to reaffirm our
1st or second, they hold both loans. We were never late on either loan before during or after the BK and plan on staying in the home and paying. When we filed they closed the HELOC immediately. Now since the discharge the credit reports all show the HELOC as closed and discharged through BK. I called the mortgage company today and asked for the status of the loan. After the rep looked up my account I could tell she was hesitant to tell me the status of the acct. and she said to leave a message for the dept. that handles debt recovery. Of course they do not returm my calls. My question is, is this account closed as it is reported and have I been paying them monthly on a discharged debt? I have left a message for the BK atty but I doubt he will return my call either now that our case is long done and over with.

From what I have been reading it appears the debt secured by the home will remain until we sell but I still am not sure if I should pay the interest payments if they discharged the debt??

Property values here in CA have tanked I am sure with the 1st and 2nd we are upside down on the loan.The 1st mortgage is being reported in the positive accounts as paid as agreed on all credit reports and the HELOC is in the negative as discharged in BK even though it was never paid late and I continue to pay on time interest only payments.Because they did not reaffirm the loans I do not receive any statements I have to call or go in the bank and ask every month the amount due. Should I stop paying it??

[newbie2]

No one can tell you if you should stop paying on your mortgages or not, only you know what is best for you. Your personal responsibility to pay on the loans is gone, however the liens still remain. Your 2nd mortgage is reporting correctly to the credit bureaus. Your first mortgage is actually doing you a favor by their positive reporting. (They don't have to if you don't reaffirm. They can simply say "IIB" Balance -0-)

Good luck to you in whatever you decide.

[biotechsolution]

the HELOC will always report IIB because you didn't reaffirm the debt. In all actuallity the 1st should be reporting the same way since it wasn't affirmed.
The debt hasn't been discharged, just your liability to the debt. The HELOC is still secured by the house. If you plan on selleing it at anytime you will have to get permission from the 2nd. If you don't plan on staying in the house until it is not upsidedown, It may not make sense to continue to pay.

[vleisme]

After I posted this today the credit union called me back . She said that it is just the way the credit bureaus report after BK and I said what if I stopped paying she said they could proceed w/ a forclosure. I guess that would be the gamble I would have to take if I stopped paying and since it is not a hardship, I will continue to pay. My main concern was that I was paying for a debt that they had written off knowing they would keep taking money if I was willing to pay. If it is a risk for forclosure I will continue to pay. She said even though it is reporting negative if I paid as agreed they would write a letter after it is paid off stating we paid in full for whatever that might be worth in the future ,if anything.

[albacore44]

i was luck enough to have mY HELOC report as "Account Closed, Paid as agreed". I still owe them, but haven't paid in more than 6 months

[2manybills]

I have not paid on mine since February. Since mine is upside, I will be attempting to settle HELOC for 10 cents on the dollar. Albacore: Any luck in that area yet?

[tcreegan]

Hi vleisme,

With 2 different lenders, if there is not enough equity to cover the 1st, the 2nd becomes essentially worthless and you approach the 2nd lender w/ an offer to settle. But both loans w/ the same lender...hmmm......might complicate things....

No matter what, if you are upside down/underwater there is no incentive for the lender to foreclose as long as you are making payments.

...they would keep taking money if I was willing to pay. ...oh you betcha!

My question is, is this account closed as it is reported .....as you can see by the posts, credit reporting is not an exact science. Don't rely on the credit report for the status of the loan, you need to hear it from the lender. Also, 'charged off' can just be internal accounting by the lender, it doesn't necessarily mean the debt has disappeared, often the debt gets sold to a collection agency.

even though it is reporting negative if I paid as agreed they would write a letter ..contrary to popular belief, a bank/credit union/financial conglomerate doesn't have to, but can report on discharged debt..usually you have to ask in writing. Of course you want to be current and not late....

Hopefully the credit union will be cooperative...

Tom in Colo