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HELOC upside down after Discharge

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    HELOC upside down after Discharge

    Hi, I've seen a lot of posts about settling, but wanted to post to give the particulars of my situation. I'm $57K upside down on my loans. Fh would like to pay off the HELOC in full, but I'm not sure if that is the right decision and if we should settle instead?

    I was discharged Ch7 BJ 1/2010, my HELOC was included. HELCO has a third lien. The mortgage company (1st lien) and HELOC are through the same bank. I received a post card in the mail from a realtor with the average sales price of homes in my area, $124K for townhouse properties sold in my neighborhood in the last 7 months. We plan to keep the property and live here for another year and then keep it as a 2nd home.

    Balances:
    1st Lien Mortgage $139K - always paid on time no lates, included in bk
    2nd Lien $15K, - 0% interest, no payments, it was a 1st time homeowner program and just has to be paid back if the home is every sold or refinanced, included in bk
    3rd HELOC - $27K - always paid on time no lates, included in bk

    Also, if I'm able to settle are they any tax issues to consider?

    Thanks in advance for your advise.

    #2
    The BK protects you from the tax liability, you have discharged the debt. You could probably settle the HELOC for about $2000-$4000, lump sum payment. You should definitely NOT pay off the HELOC in full, colossal waste of money.

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      #3
      Thanks HHM

      Comment

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