Hello all...
This is my first post to the forum, although I've been reading it for several months now. Thank you everyone for the WEALTH of help and information here!
I'll try to explain the complication of my bankruptcy situation as simply as I can, but you might have to read this next part twice...
I divorced in March of 2008 (Idaho, Community Property State).
Ex-husband and I are on very good terms. To allow him to keep the family home, he retained a higher portion of our "marital debt" to help settle our estate equitably. Per our divorce agreement, he kept the 1st Mortgage on the home (B of A), and a 2nd HELOC (Chase). He has always been on the paperwork for the first mortgage. At the time we applied for the HELOC, I had a better credit score. He signed a quit deed so the house was owned by me. I applied, and got the HELOC. Per our divorce agreement, he was to get the HELOC refinanced in his name...and I was to quit deed the house back to him. I did quit deed the house back to him. He tried to get the refinance. However...this was when the housing market began to plummet, and there was no longer enough equity in the home for anyone to re-write the loan. For the last 2 1/2 years, he has been keeping both payments current, but the HELOC is legally only written in my name. We assumed at first the market would recover, and he would eventually get it rewritten. We now know that is not going to happen in the near future.
I am re-married now, (still in a community property state). My new husband and I had some debt from the refurbishing of a house he owned, and living in my apartment for awhile to get that done. We planned to do Consumer Debt Counseling, and consolidate that debt and start to pay it down once we had one household. Nobody would put us on any sort of re-payment plan though...because of the huge HELOC in my name. It put our debt to income ratio too low to qualify for re-payment. (even though the account has always been current, and i can show someone else is making the payments, I am the one legally liable for the loan if the other person became unable to make the payments) This began the process of my new husband and I deciding to file a Chapter 7 Bankruptcy. We have learned that this is the only way to protect ourselves, and get out of the legal liability of the HELOC on the house from my previous marriage. (if something happened, and my ex could no longer pay...that property would be foreclosed, and they'd still be able to legally come after me for the amount of the HELOC) Our Chapter 7 is fairly simple, now that we've had the opportunity to digest how it works...(and get over all the really screwed up ways the bankruptcy laws allow you to be raped by your divorce agreements, but the federal courts don't have to honor anything about them that would protect you in a community property state).
We will file, and retain our own home on a ride-through. (Filing in February with our tax refund when it arrives)
I am listing the HELOC with Chase Bank as a non-secured debt (since I do not own the house on which the loan is attached) I have given Chase Bank permission to discuss the account with my ex-husband, who would like to try to negotiate some sort of deal with them to settle the HELOC after my Bankruptcy. The house is not underwater on the first alone, but is substantially underwater when the HELOC is added in.
1st Mortgage: 138,000
HELOC: 124,000
Fair Market Value of Home: 170,000
We skipped one payment with Chase, and I waited for phone calls to let them know I'd be including it in a bankruptcy. Now my ex-husband is negotiating with them to bring the account "current". I can actually file a Chapter 7 legally with the account not current though, since for me it is technically a non-secure debt.
Finally! My questions... (sorry for the length...)
Chase says if the account is past due, and the bankruptcy closes, they will immediately foreclose. My ex-husband wouldn't mind "gambling" a bit, and saving some of those payments towards a settlement offer with them. He does not want to lose the house though.
Can Chase foreclose immediately without permission from Bank of America, who holds the first? (since the first is not underwater on its own)
And...in your experiences out there with bankruptcy, and Chase in particular in a 2nd position where there is "some" money to be gained by them...but, not much considering costs, etc of foreclosure... (on a good day, they'd have up to 35,000 on their 120,000 loan BEFORE their expenses of foreclosing)...will they simply rush in and foreclose? The Chase account manager states it is their policy, and if the HELOC is behind, they will foreclose immediately when the bankruptcy dismisses.
Since the account does not exist on his social security number anywhere, the default and bankruptcy won't be on his credit report. So, with the money he's been saving, and if it feels "safe" to let the HELOC get behind for 6 months or so, he could be in a good position to settle with them for about what they would get on a "perfect" day by foreclosing.
Opinions? Advice?
He is looking for a lawyer to advise him... But this board has been so fantastic, I wanted to float it out here too.
We know Chase can't contact me after the bk closes. We know that my ex-husband can ride through on the current terms and nothing would get foreclosed as long as he keeps things current. He is researching trying to get BofA to "buy out" the 2nd from Chase and refinance to him after the bankruptcy since the first mortgage is paid down enough...and there is some "room" for BofA to bump up their loan amount to him. Chase will know at that point that they have no one to legally pursue for the full amount of the HELOC. They will simply have a 2nd position that doesn't hold much value, and doesn't look like it will any time in the near future. Has anyone seen this done?
OK...THANKS!!!
This is my first post to the forum, although I've been reading it for several months now. Thank you everyone for the WEALTH of help and information here!
I'll try to explain the complication of my bankruptcy situation as simply as I can, but you might have to read this next part twice...
I divorced in March of 2008 (Idaho, Community Property State).
Ex-husband and I are on very good terms. To allow him to keep the family home, he retained a higher portion of our "marital debt" to help settle our estate equitably. Per our divorce agreement, he kept the 1st Mortgage on the home (B of A), and a 2nd HELOC (Chase). He has always been on the paperwork for the first mortgage. At the time we applied for the HELOC, I had a better credit score. He signed a quit deed so the house was owned by me. I applied, and got the HELOC. Per our divorce agreement, he was to get the HELOC refinanced in his name...and I was to quit deed the house back to him. I did quit deed the house back to him. He tried to get the refinance. However...this was when the housing market began to plummet, and there was no longer enough equity in the home for anyone to re-write the loan. For the last 2 1/2 years, he has been keeping both payments current, but the HELOC is legally only written in my name. We assumed at first the market would recover, and he would eventually get it rewritten. We now know that is not going to happen in the near future.
I am re-married now, (still in a community property state). My new husband and I had some debt from the refurbishing of a house he owned, and living in my apartment for awhile to get that done. We planned to do Consumer Debt Counseling, and consolidate that debt and start to pay it down once we had one household. Nobody would put us on any sort of re-payment plan though...because of the huge HELOC in my name. It put our debt to income ratio too low to qualify for re-payment. (even though the account has always been current, and i can show someone else is making the payments, I am the one legally liable for the loan if the other person became unable to make the payments) This began the process of my new husband and I deciding to file a Chapter 7 Bankruptcy. We have learned that this is the only way to protect ourselves, and get out of the legal liability of the HELOC on the house from my previous marriage. (if something happened, and my ex could no longer pay...that property would be foreclosed, and they'd still be able to legally come after me for the amount of the HELOC) Our Chapter 7 is fairly simple, now that we've had the opportunity to digest how it works...(and get over all the really screwed up ways the bankruptcy laws allow you to be raped by your divorce agreements, but the federal courts don't have to honor anything about them that would protect you in a community property state).
We will file, and retain our own home on a ride-through. (Filing in February with our tax refund when it arrives)
I am listing the HELOC with Chase Bank as a non-secured debt (since I do not own the house on which the loan is attached) I have given Chase Bank permission to discuss the account with my ex-husband, who would like to try to negotiate some sort of deal with them to settle the HELOC after my Bankruptcy. The house is not underwater on the first alone, but is substantially underwater when the HELOC is added in.
1st Mortgage: 138,000
HELOC: 124,000
Fair Market Value of Home: 170,000
We skipped one payment with Chase, and I waited for phone calls to let them know I'd be including it in a bankruptcy. Now my ex-husband is negotiating with them to bring the account "current". I can actually file a Chapter 7 legally with the account not current though, since for me it is technically a non-secure debt.
Finally! My questions... (sorry for the length...)
Chase says if the account is past due, and the bankruptcy closes, they will immediately foreclose. My ex-husband wouldn't mind "gambling" a bit, and saving some of those payments towards a settlement offer with them. He does not want to lose the house though.
Can Chase foreclose immediately without permission from Bank of America, who holds the first? (since the first is not underwater on its own)
And...in your experiences out there with bankruptcy, and Chase in particular in a 2nd position where there is "some" money to be gained by them...but, not much considering costs, etc of foreclosure... (on a good day, they'd have up to 35,000 on their 120,000 loan BEFORE their expenses of foreclosing)...will they simply rush in and foreclose? The Chase account manager states it is their policy, and if the HELOC is behind, they will foreclose immediately when the bankruptcy dismisses.
Since the account does not exist on his social security number anywhere, the default and bankruptcy won't be on his credit report. So, with the money he's been saving, and if it feels "safe" to let the HELOC get behind for 6 months or so, he could be in a good position to settle with them for about what they would get on a "perfect" day by foreclosing.
Opinions? Advice?
He is looking for a lawyer to advise him... But this board has been so fantastic, I wanted to float it out here too.
We know Chase can't contact me after the bk closes. We know that my ex-husband can ride through on the current terms and nothing would get foreclosed as long as he keeps things current. He is researching trying to get BofA to "buy out" the 2nd from Chase and refinance to him after the bankruptcy since the first mortgage is paid down enough...and there is some "room" for BofA to bump up their loan amount to him. Chase will know at that point that they have no one to legally pursue for the full amount of the HELOC. They will simply have a 2nd position that doesn't hold much value, and doesn't look like it will any time in the near future. Has anyone seen this done?
OK...THANKS!!!
Comment