What will happen to the house?

[moo]

Here is a what if question.

The plan is to file Ch7 (Timing unknown) and plan to include the house. We have a 1st and HELOC. HELOC is basically unsecured because the house is so far underwater. The house is not even worth enough to cover the first. We are current on the first, but have not paid the HELOC for a few months.

After discharge we would not owe the balance of the loans anymore. If we were to continue making good faith payments to the first what would the HELOC be able (Most lickly) to do (Start foreclosure?)?

Thank You

[BobMango]

The lender on the HELOC could start foreclosure proceedings, but would probably not do so until the value came back up enough to ensure that they would get something for it.

If you are thinking this will provide a lower cost of living for you then it might be worth a gamble, but I think you are probably better off just letting the house go and moving on with your life. If the house is going to be lost to foreclosure anyway, just be done with it. Save the money you'd pay to the first to get you into a new rental.

[moo]

Thats what I was thinking too. Just trying to explore all the options and scenerios. This is so nerve racking on making the step to filing.