Will filing bankruptcy help resolve my mortgage problem? 16 Answers as of September 23, 2013

I have a HELOC and mortgage with ex-wife. I signed quit claim and have no rights to property. Bank wants to settle HELOC for 10% maybe, loan is around $30,000. I do not want to pay anything since I haven't been there in over 5 years. Ex walked away and I have no idea what has gone on in the place, etc. Is filing bankruptcy best for me or should I work it out and hope it gets resolved?

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Janet A. Lawson Bankruptcy Attorney
Janet A. Lawson Bankruptcy Attorney | Janet Lawson
If it is a purchase money loan (and if you are in California), there is no deficiency balance if the lender forecloses. The risk, if the loan was not obtained at the time of purchase, is that the lender will give you a 1099 C for foreignness of debt. This can be avoided if you are insolvent at the time of the foreclosure. I suggest you consult with a knowledgeable bankruptcy attorney.
Answer Applies to: California
Replied: 9/23/2013
The Law Office of Darren Aronow, PC
The Law Office of Darren Aronow, PC | Darren Aronow
If you file bankruptcy then the bank can not sue your for not paying. The fact that you signed a quit claim deed is irrelevant to the bank. It does not just work itself out, you should file the bankruptcy to clear your name.
Answer Applies to: New York
Replied: 9/23/2013
Fears Nachawati | Sean T. Flynn
Filing bankruptcy will discharge the mortgage debt.
Answer Applies to: Texas
Replied: 9/23/2013
Charles R. Chesnutt, P.C.
Charles R. Chesnutt, P.C. | Charles R. Chesnutt
A Chapter 7 will discharge your debt to HELOC.
Answer Applies to: Texas
Replied: 9/23/2013
Stephens Gourley & Bywater | David A. Stephens
Whether bankruptcy is the best depends on what other credit issues you have. A bankruptcy would discharge the debt. If your credit is solid and you can afford it, you may want to work it our rather than damage your credit with a bankruptcy.
Answer Applies to: Nevada
Replied: 9/20/2013
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    I am not in a position to advise you what is best for you, but I can tell you that going into pre-bankruptcy credit counseling can help make the decision clearer for you. I do think it would be foolish to file bankruptcy if all you owe can be resolved with $3,000.
    Answer Applies to: Nevada
    Replied: 9/20/2013
    Elkington Law
    Elkington Law | Sally Elkington
    It is best you do something and not walk away like your ex. If you can settle with them (there will be tax consequences) and it is not detrimental to you, you should seriously consider it. If you can't pay it and want to get rid of the debt. Bankruptcy might be a good option. Talk to an attorney about it, but don't be talked into a bankruptcy if you don't need it.
    Answer Applies to: California
    Replied: 9/20/2013
    Law Offices of Linda Rose Fessler | Linda Fessler
    If your only debt is the HELOC and you can get them to settle for $3000, you may want to consider paying them to preserve your credit rating. But if you are struggling with other debts, I would consider a bankruptcy. But first I would find out what is going on with the house. There may have been a foreclosure which would explain why they are willing to "settle" with you.
    Answer Applies to: California
    Replied: 9/20/2013
    Stuart P Gelberg
    Stuart P Gelberg | Stuart P Gelberg
    Bkry will require you to pay all that is owed on the mtges.
    Answer Applies to: New York
    Replied: 9/20/2013
    Goldsmith & Guymon
    Goldsmith & Guymon | Marjorie Guymon
    Bankruptcy may resolve the problem, but you need to understand when you file bankruptcy you must be eligible to file a Chapter 7 and discharge all your debt. Otherwise you must file a Chapter 13 and repay a portion of your debt. Someone needs to do this analysis to determine whether it would be cheaper for you to just accept the reduced settlement.
    Answer Applies to: Nevada
    Replied: 9/20/2013
    Law Offices of David A. Tilem | Michael Avanesian
    Not detailed enough and some of the advice we can give would not be given over the internet. There are many complex issues involved here including what you want to happen with that property. If the only question is should you settle heloc for 10% ($3,000) or find a craptastic attorney to file bk for you for $999, then I'd say just pay the 3k. However, you must be sure that's all there is to it. For example, even after filing bk, if your name is on title to the house and HOA fees are involved, you will be responsible for post bankruptcy HOA fees until the bank forecloses. There are secret ways around that but bottom line, we need to know more about your situation.
    Answer Applies to: California
    Replied: 9/20/2013
    Frank Law Group, P.C.
    Frank Law Group, P.C. | David E. Frank
    Normally best to avoid BK, especially if it will only cost you $3,000. But I would need a lot more info to properly advise you.
    Answer Applies to: California
    Replied: 9/20/2013
    Tokarska Law Center
    Tokarska Law Center | Kathryn U. Tokarska
    Impossible to answer without knowing more information about your other debts, income & assets. This is a type of debt that is potentially dischargeable in a bankruptcy case but not sure if filing bankruptcy is appropriate without knowing more information about you and your financial situation. A consultation with a bankruptcy attorney would be a good way for you to get answer to this question and others you may not have yet considered.
    Answer Applies to: California
    Replied: 9/20/2013
    Janke Legal Consulting | Bruce C. Janke
    I would need more information. Is the house under water (total of two loan balances exceeds market value) I so, why would you want to try to save it? On the other hand, if you do have equity in the property, it could be worth trying to save. But you would have to work out a plan with both lenders to either pay of the loan balances or a modification or a plan to bring the loan current over time. If you ex walked away some time ago, the loan could be delinquent by many months. I never advise bankruptcy solely to try to save a house. You should only consider BK if you have large amounts of unsecured debt such as credit cards that you cannot pay. If the lender starts foreclosure, BK may be able to delay it, but not prevent it. The reason the second mortgage holder is willing to negotiate with you is that if the first lien holder forecloses, the security interest of the second is wiped out.
    Answer Applies to: California
    Replied: 9/20/2013
    Uriarte & Wood, Attorneys at Law
    Uriarte & Wood, Attorneys at Law | Robert G. Uriarte
    It depends on what your financial situation is and what types of assets you have.
    Answer Applies to: California
    Replied: 9/20/2013
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Depends on your other circumstances and debt.
    Answer Applies to: Michigan
    Replied: 9/20/2013
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