Do I need to continue paying my home equity if it was included in my bankruptcy? 13 Answers as of March 30, 2012

My home equity was included in my bankruptcy, do I need to continue paying on it? How does that work in the future if I sell, etc.?

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Debt Relief Law Center | Roger J. Bus
Home equity loans are not discharged in a Chapter 7 unless you rejected the real estate. If you still have the home, and wish to keep it or sell it, you will need to pay on the second mortgage or get their permission to sell the property.
Answer Applies to: Michigan
Replied: 3/30/2012
Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
The equity line is a secured debt. It is a lien on the house. If you don't pay it, the lender may foreclose. When you sell it, they have to paid for escrow to close.
Answer Applies to: California
Replied: 3/30/2012
Philip R. Boardman, Attorney at Law
Philip R. Boardman, Attorney at Law | Phil Boardman
The home equity bank can still foreclose if the payment is not made. Even though you filed bankruptcy, that loan is still attached to the house unless you did a lien strip in a chapter 13.
Answer Applies to: Virginia
Replied: 3/29/2012
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
If you filed a chapter 7 and never avoided the lien (which most judges will not allow it in a chapter 7), then the lien on the house is still there and you can either settle it or file a chapter 13 to remove it if there is no equity in the house.
Answer Applies to: New York
Replied: 3/29/2012
Law Office of Asaph Abrams
Law Office of Asaph Abrams | Asaph Abrams
I assume you had filed a chapter 7 bankruptcy and received a discharge. The home equity debt will have been discharged-meaning personal liability is eliminated; however the chapter 7 discharge will not have eliminated the security interest: in other words, the lien remains and needs to be paid off in order for title to be had. Failure to pay and resulting default would permit the mortgagee (the lender) to foreclose.
Answer Applies to: California
Replied: 3/28/2012
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    If you want to keep the home, you need to keep paying it. A Home Equity Loan is secured against the home and if you don't pay it then you will get foreclosed on by the bank. The bankruptcy helps you in the sense that you are not liable for the debt but if you want to keep the collateral you need to pay.
    Answer Applies to: California
    Replied: 3/28/2012
    Law Office of Jeffrey Solomon
    Law Office of Jeffrey Solomon | Jeffrey Solomon
    If you filed a chapter 7 and did not "strip" the second mortgage, you have eliminated the debt by obtaining a chapter 7 discharge, but the equity loan retains its lien. If you do not pay the bank can foreclose, though it might not bother because it would have to take over the first mortgage. You cannot sell without the consent of the equity loan because the company retains the lien.
    Answer Applies to: Florida
    Replied: 3/28/2012
    T.K. Byrne | Timothy K. Byrne
    Talk with your attorney who drafted the chapter 13 plan that you fixed your signature upon. It will clearly state how and where the home equity debt is to be paid. I provide all my clients with a copy and explanation of their chapter 13 plan
    Answer Applies to: Mississippi
    Replied: 3/28/2012
    Bankruptcy Law office of Bill Rubendall
    Bankruptcy Law office of Bill Rubendall | William M. Rubendall
    If you have a lender or lenders on your home you must keep them current in order to continue owning your house. Otherwise, they will foreclose.
    Answer Applies to: California
    Replied: 3/28/2012
    Charles Schneider, P.C.
    Charles Schneider, P.C. | Charles J. Schneider
    No. To sell you must still pay the mortgage liens.
    Answer Applies to: Michigan
    Replied: 3/28/2012
    Dan Wilson Bankruptcy
    Dan Wilson Bankruptcy | Dan Wilson
    If you do not make your house payments lender will foreclose. You don't get a free house.
    Answer Applies to: Colorado
    Replied: 3/28/2012
    The Stockman Law Office | Mary Stockman Esq.
    Yes and yes. The exception would be if you filed a chapter 13 and your attorney filed a motion to stip the lien of the unsecured but recorded equity loan.
    Answer Applies to: Florida
    Replied: 3/28/2012
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    The first thing to remember is the personal liability for payment of the home equity loan is discharged by the bankruptcy, but the lien on the house is not removed by the bankruptcy. If the current value of the house is less than what is owed to the first lienholder, then the home equity lender will not be in a position to foreclose is all the lender would accomplish is having to start paying the first position lien holder or the first could foreclose and eliminate the home equity lien. With no equity the home equity lender has no incentive to foreclose, and since your obligation to pay was discharged by the bankruptcy, if you do not pay the home equity lender then they are in no win situation. However, the lien remains on the property and if you were to ever sell the property, the home equity lender could demand the full amount then due in order to release its lien. If the house currently is worth more than what is owed to the first lien holder, there is some equity for the home equity lender, if you do not pay, then they may foreclose on its lien.
    Answer Applies to: California
    Replied: 3/28/2012
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