Can I file for chapter 7 bankruptcy on a Heloc loan? - Bankruptcy Law Questions and Answers- LawQA.com

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Can I file for chapter 7 bankruptcy on a Heloc loan?

I have a first lien Heloc on my Property for 200,250.00. If I Filed Ch 7 Bk will it wipe out the debt with the Bank and make the property free and clear? And the property was sold from Wamu to Jp Chase Mortgage.

Answer By Asaph Abrams
Law Office of Asaph Abrams
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Chapter 13 lien strip motions are routinely filed to strip wholly unsecured junior liens. Bankruptcy debtors are afforded significant debt relief; yet (alas) they do not get rewarded free homes. Answer does not address all implications of the question, nor is it legal advice to be relied upon.

Answer Applies to: California
Replied: 8/14/2011

Answer By Kevin Heupel
Heupel Law
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A chapter 7 will discharge the HELOC, meaning you would not have to pay the loan if you let the home go, but the HELOC would still be attached to the property. Thus, if you wanted to keep the property after filing chapter 7, you would still need to pay the HELOC.

Answer Applies to: Colorado
Replied: 8/9/2011

Answer By Eric Benzer
Eric J. Benzer, Attorney at Law
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Yes

Answer Applies to: Maryland
Replied: 8/6/2011

Answer By Cate Eranthe
Eranthe Law Firm
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Yes you can file for a chapter 7 if you otherwise qualify. No the property will not be free and clear of the loan. I think if you look at the county recorder's office where the property is located you'll see there is a lien for $200,250 recorded on the property. The lien survives the bankruptcy. What is discharged in the bankruptcy is personal liability. This means if the property is foreclosed the lender only takes the proceeds of the sale and cannot come after you individually for money.

Answer Applies to: California
Replied: 8/5/2011

Answer By David VanDyke
Bird & VanDyke, Inc.
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The chapter 7 will discharge your personal obligation to pay the Heloc but there is still a valid lien on your home so the answer to your question is No it will not wipe it out as long as you keep the home. You must file a chapter 13 to strip the lien from your home.

Answer Applies to: California
Replied: 8/2/2011

Theodore N. Stapleton, PC
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If you want to keep the property you must reaffirm the debt so it is not affected by the bankruptcy filing. If you surrender the property you can discharge your liability on the equity line. I am happy to discuss your options with you.

Answer Applies to: Georgia
Replied: 8/2/2011

Answer By Ray Fisher
Ray Fisher Law Offices
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Yes

Answer Applies to: Texas
Replied: 8/1/2011

Answer By Alan D. Walton
Breckenridge and Walton
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Chapter 7 bankruptcy can eliminate the debt, but you cannot eliminate the right of the lender to take the property if it is not paid.

Answer Applies to: Michigan
Replied: 8/1/2011

Answer By Eric Lewis
Indianapolis Bankruptcy Law Office of Eric C. Lewis
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In Chapter 7, only personal liability to pay back a HELOC is extinguished; the lien against the property survives. If the property is underwater to a first mortgage, Chapter 13 can be used to strip the HELOC lien.

Answer Applies to: Indiana
Replied: 8/1/2011

Bankruptcy Law office of Bill Rubendall
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Filing chapter 7 you receive a discharge for secured debts on real property. This means you will have no personal obligation if you give up the home. The secured lender retains its security interest, so to keep the property you have to keep making the payments.

Answer Applies to: California
Replied: 8/1/2011

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