If my bank files for Chapter 11 and the online account where I make payments is closed, does that mean I don't need to pay the rest? 16 Answers as of October 31, 2013

I have a HELOC on my house. The bank of my HELOC just filed for Chapter 11. My online account where I usually make my payments is closed. Does that mean my HELOC is clear (I don't need to pay the rest)?

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Law Office of Thomas C. Phipps | Thomas C Phipps
You will have to wait for instructions from the bankruptcy court and the trustee.
Answer Applies to: Missouri
Replied: 10/31/2013
Stephens Gourley & Bywater | David A. Stephens
It does not mean you are free and clear. The note will probably be sold to and collected by another entity.
Answer Applies to: Nevada
Replied: 9/18/2013
Elkington Law
Elkington Law | Sally Elkington
No, your debt to your lender does not go away if they file bankruptcy. Your debt is an asset of the lender and it could be sold or transferred.
Answer Applies to: California
Replied: 9/18/2013
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
No, you would have to pay to the chapter 11 trustee.
Answer Applies to: New York
Replied: 9/18/2013
Armstrong Kellett Bartholow P.C.
Armstrong Kellett Bartholow P.C. | Gary Armstrong
You still owe the debt. I imagine that you will get instructions soon about where to make your payment. If not, make it by mail as specified in your loan documents or in the most recent statement you received.
Answer Applies to: Texas
Replied: 9/18/2013
    Marc S. Stern
    Marc S. Stern | Marc S. Stern
    No, it means that you need to figure out where to make the payments. At the bare minimum, you need to set the payments aside so that when you figure it out you have the missing payments.
    Answer Applies to: Washington
    Replied: 9/17/2013
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    In your dreams! It may be possible to settle the HELOC loan for a lump sum payment, but the loan and the lien can be collected from whoever ends up purchasing your debt through the bankruptcy court. After all, you are not the one in bankruptcy, and the assets of the bank will be part of the bank's reorganization through Chapter 11.
    Answer Applies to: Nevada
    Replied: 9/17/2013
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    Chapter 11 means they are restructuring. It does not mean they are going out of business. Even if they were closing their doors the notes themselves would be sold to a new bank and you would be notified where to make your payment. You are still obligated to make payments.
    Answer Applies to: Nevada
    Replied: 9/17/2013
    Danville Law Group | Scott Jordan
    No, it does not. You need to continue sending payments, it is likely that some other bank has assumed the account.
    Answer Applies to: California
    Replied: 9/17/2013
    Law Offices of David A. Tilem | Michael Avanesian
    Sorry, you still owe them the money. A savvy attorney may be able to buy the note from the bank through the bankruptcy at a discounted price but whether that is worth pursuing depends on how much your second is for etc.
    Answer Applies to: California
    Replied: 9/17/2013
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    No. You still owe the debt and you are still obligated to make your loan payments.
    Answer Applies to: Colorado
    Replied: 9/17/2013
    Law Office of Stuart M. Nachbar, P.C.
    Law Office of Stuart M. Nachbar, P.C. | Stuart M. Nachbar
    No it does not. It means that you need to send the check in.
    Answer Applies to: New Jersey
    Replied: 9/17/2013
    Law Office of Barry R. Levine | Barry R. Levine, Esq.
    If your bank filed a chapter 11, it remains, for the bank, business as usual. Your mortgage and promissory note and not forgiven because of the chapter 11 filing. It may take the bank a while to get its act together operating as a debtor in a chapter 11, but eventually systems will be in place to accept your payments.
    Answer Applies to: Massachusetts
    Replied: 9/17/2013
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    No it does not mean that . They had to close accounts as a part of ch11 filing. Mail the payment in.
    Answer Applies to: California
    Replied: 9/17/2013
    Stittleburg Law Office
    Stittleburg Law Office | Bernd Stittleburg
    Yes, because another entity will most likely take over the bank if the Chapter 11 does not work.
    Answer Applies to: Georgia
    Replied: 9/17/2013
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    No. Just because there is a bankruptcy does not mean that all of the assets, like your loan, just go by the wayside. It is an asset of the bankruptcy estate and someone will be contacting you about the loan and the payments and your loan will likely be sold to another lender.
    Answer Applies to: California
    Replied: 9/17/2013
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