HELOC after Chapter 13 discharge

[Abend1402]

We completed a 5 year Chapter 13 bankruptcy. Our HELOC was not included in the repayment plan. When I reached out to the bank after discharge they would not work with me to set up payments. The account has been "charged off" but it is still on the books and the collections department wants me to pay off the balance in full or in payments over 4-5 years which is more than our 1st mortgage payment. I understand that they still maintain a lien against our home. This account does not show on my credit. Can they report smaller payments outside of their schedule to the credit bureau as a delinquency? Can they try and foreclose on the home?

[justbroke]

Welcome to BKForum!

It reads as though you were in a Chapter 13. In a Chapter 13 you have to pay all of your secured creditors. A debtor that owns a home, however, may be able to strip away junior liens (second/third mortgages) in a Chapter 13. It appears that you did not pay on the second mortgage (HELOC) which to me is an indicator that the lien was not "secured."

Unfortunately you'll need to go back to your attorney. Here's why.

If you actually did a Motion to Determine Secured Status and Strip Lien and it was granted, then that lien was actually stripped off. The HELOC lender would no longer have a lien against the property. Even with that, the HELOC lender would still show that you had an account with them that was written off, but they would have no lien. In other words, if this was a properly stripped off lien, then the HELOC creditor has no recourse against you. They would not be able to foreclose. They would not be able to make you pay. They would not be able to report a delinquency on your credit report.

Do you remember if your attorney stripped off the lien? That's the only way I can see you not paying the HELOC during the Chapter 13.

To properly answer your question, we would need to know if your attorney filed that Motion to Determine Secured Status and Strip Lien of the HELOC creditor. If they did, and it was granted, then the lien is stripped upon discharge. You should be able to get the creditor to file a Satisfaction of Mortgage if that is the case. But first you need to find out if that lien was stripped off in the Chapter 13.