Answers
My husband passed away last year and I have medical bills and credit card bills that I can't pay, would like to know if I were to file bankruptcy can I include my home equity line of credit?
I am not looking for a loan, I was just wanting to know about my home equity loan and bankruptcy.My husband passed away and I am not working due to medical reasons and a have limited income. My father has been helping me but I can't expect his help forever.
Speak to a lawyer. However, a HELOC is a secured loan -secured by a lien on your home. I doubt that it can be discharged through BK.
www.realcase.com Lenders assign you a credit score any time you apply for credit. This is there way of them determining whether you are a likely ...
I am filing for bankruptcy and have negative equity in my home.
You are REQUIRED to report ALL debts when filing for bankruptcy. However, if you keep the house, you keep all debts secured by the house.
Your HELOC is a line of credit against which you've pledged your house as collateral. In other words, it is a mortgage, probably a 2nd or 3rd mortgage.
What would happen in bankruptcy would depend on a large number of factors:
First of all, are you contemplating filing Ch 7 or Ch 13? If Ch 7, are you eliglble? (Since 2005 there is now a "means test" that you need to pass in order to file Ch 7; otherwise Ch 13 is the only option.)
Second, is there actually any equity that secures the HELOC? If this is a 2nd or 3rd mortgage, then the more "senior" secured lenders get their loans secured by actual value in the property first. I have seen people with not just 2 or 3, but even 4 or 5 mortgages (including HELOCS) allegedly secured by the same property. The order in which they get a piece of the pie is determined by the order on file with your registrar of deeds.
So here's an example: Suppose you own a home that used to be valued at $150,000. You have a 1st mortgage on which you still owe $90,000; a 2nd mortgage on which you owe $40,000, and a HELOC on which you owe $10,000. Now let's say the value of your home has dropped from $150,000 to $100,000. Your first mortgage, on which you still owe $90,000 is secured by the first $90,000 of value in the house. Your second mortgage (for $40,000) is secured by the now-only $10,000 of remaining actual equity in the house. Your HELOC, in this case, is not secured by anything, because there is no longer any value to secure it. So basically, your HELOC is now an UNsecured debt. That's IF the scenario in your situation is anything like the hypothetical one I just painted. A good bankruptcy attorney MAY be able to find a way to discharge it (depending on other circumstances of your debts and assets).
Current bankruptcy law (since 1978) does make a notable exception for debts secured by your principal residence, making them treated differently from any other debt secured by any other collateral. "Stripping" (reducing the amount of the debt owed to the value of the property) is allowed for all debts OTHER than those secured by your principal residence.
However, there is currently legislation being proposed to Congress to change this, possibly as part of the national response to the current mortgage crisis. This legislation has not yet been passed - and may not even be relevant to your situation. However it is something you may hear about in the news.
The best source of info regarding your particular situation is a local bankruptcy attorney. Most offer free or low cost initial consultations, so take advantage of that.
** EDITed because Y!A "coffee break" cut off my original answer in mid-sentence.
I live in NY State. I recently took a home equity line of credit on my investment property. I used that amount to pay off the balance on another home...the one I live in. Now, I'm finding out I'm still unable to get my financial situation under control so I'm considering bankruptcy. If I file for bankruptcy will I be able to keep the home I live in or will it be taken away ( especially since the only reason it's paid off is because I used the line of credit from the other property)?
Thanks
Let me clarify the question:
Will I be allowed to keep the home that I live in?
More INFO: I'm retired and have no income but what I get from my investment property....yet that's not enough to pay the bills.
If you file BK, there is a law that talks about "preferential transfers." Here you took equity out to pay debt of another. The lender who could be stuck with the bad loan can claim it was a preferential transfer and attempt to ask to the court to foreclose both homes in order to be repaid. The transfers are generally looked 90 days and sometimes up to 12 months back on everything you did.
I would highly seek the advice of both a BK attorney and an asset protection attorney to help you.
Good Luck!
recently he got a letter from home equity line of credit bank's attorney saying that they are trying to collect debt and all that, he doesn't have the money any more so what happens, now, what are his option filing a bankruptcy or?
He would have to sell the house if he wants to dismiss this via a bankrupsy.
How To Pay Your Credit Card Bills Faster : Mag iPhone
Should You Use Your Home Equity To Pay Off Credit Card Debt?
Many people who are deep into credit card debt think of using their home equity to pay off their loans. This can be either good or bad depending on how good you are at managing money. The three main benefits of doing this are:
1. Low rates of interest.
The interest rate on your home equity account will be three, four, or more percent cheaper than the interest rate on your credit card. This lets you keep more of your money in your pocket.
2. Pay off loan faster.
Since you have a lower rate of interest,, you will be able to liquidate your debt a lot quicker. For instance, assume that your credit card annual interest rate is 20% and your balance is $5,000. If you pay the balance off in 12 months, you’ll pay approximately $5,558 total. If, you transfer your debt to your 5% home equity loan, you can pay this debt off in only 11 months.
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