Would part of my debt to the home equity be eliminated through chapter 7? 23 Answers as of March 10, 2014

I am filing Chapter 7 and have a home equity loan. I learned that I am not on the deed but on the loan as my husband purchased the house prior to our marriage. Do I still maintain paying the loan? My husband (now separated) pays the mortgage. I thank you for your time.

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Law Offices of Daniel J Winter
Law Offices of Daniel J Winter | Daniel J Winter
Your liability on the home equity loan should have been eliminated as long as it was listed and you took it out before you filed the Chapter 7. Check with your lawyer on these facts.
Answer Applies to: Illinois
Replied: 3/10/2014
Stephens Gourley & Bywater | David A. Stephens
It will discharge your personal liability for the home equity line, but it will remain as a secured mortgage against the property meaning they could foreclose unless it is paid.
Answer Applies to: Nevada
Replied: 3/5/2014
Law Offices of Craig B. Friedberg, Esq. | Craig Friedberg
You should speak to your bankruptcy attorney first. But in general, your responsibility for the home equity loan will be removed should you successfully complete your ch. 7 bankruptcy.
Answer Applies to: Nevada
Replied: 3/5/2014
Goldsmith & Guymon
Goldsmith & Guymon | Marjorie Guymon
You will discharge the loan amount, but the equity loan will remain on title to the house.
Answer Applies to: Nevada
Replied: 3/5/2014
Law Office of Marlin Branstetter
Law Office of Marlin Branstetter | Marlin Branstetter
Generally home equity loans are considered secured loans and are not eliminated by filing a chapter 7 bankruptcy. In some case they may be eliminated in chapter 13.
Answer Applies to: California
Replied: 3/5/2014
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    No, You can only eliminate a second lien in Ch. 13 if the first mortgage is more than the current value of the house. You need to see a lawyer to determine if this will work for you.
    Answer Applies to: California
    Replied: 3/5/2014
    Heineman Law Office
    Heineman Law Office | Jeff Heineman
    No. The Chapter 7 discharge will eliminate your liability to the loan.
    Answer Applies to: Idaho
    Replied: 3/5/2014
    A Fresh Start
    A Fresh Start | Dorothy G Bunce
    Obtaining a bankruptcy discharge will eliminate your personal obligation to pay this debt BUT the property will still owe the debt and that will not disappear in a Chapter 7. Should the property be sold, the back payments, with interest and late fees and everything else, would come out of the purchase price before you would be paid your share of any profit. In theory, the lender could also foreclose, although for financial reasons, most won't.
    Answer Applies to: Nevada
    Replied: 3/5/2014
    Patrick W. Currin, Attorney at Law | Patrick Currin
    Any personal responsibility for the equity line would be discharged.
    Answer Applies to: California
    Replied: 3/5/2014
    Danville Law Group | Scott Jordan
    Are you represented by an attorney? With this type of complication, you should be properly advised and aware of the consequences of filing bankruptcy. Generally, your personal liability for paying any debt is discharged, meaning, the creditor cannot sue you personally for any debt once you obtain your discharge. However, if the debt is secured to your property, which it likely is, if the debt is not paid in accordance with the terms of the repayment contract, the creditor can foreclose on the property and take it from you.
    Answer Applies to: California
    Replied: 3/5/2014
    MCBRIDE LAW OFFICE | Robert E. McBride
    Are you sure you are not now and have never been on the deed? That could be very important depending on the amount of equity in your home. Your personal liability to repay the equity loan should be wiped out if you receive a Chapter 7 discharge. However, your home will not be released from the mortgage. Therefore, if you intend to keep the home, the mortgage must be paid even if your personal liability is discharged.
    Answer Applies to: Pennsylvania
    Replied: 3/5/2014
    Law Office of Pho Ethan Tran PLLC
    Law Office of Pho Ethan Tran PLLC | Pho Ethan Tran
    Yes. As long as you don't reaffirm the mortgage debt during the bankruptcy proceedings, it should be ordered discharged by the court. However, you or your husband must continue to pay for the mortgage each month or the creditor may move to foreclose on the house.
    Answer Applies to: Texas
    Replied: 3/5/2014
    Deborah F Bowinski, Attorney & Counselor at Law | Debby Bowinski
    Home equity loans are like mortgages in that they are secured by a lien against the property. You can discharge your obligation to repay the dollars owed on the loan HOWEVER, the lien still exists and is still secured by the property even after a bankruptcy filing. That means that if you choose not to pay the loan payments the lender will have the ability and the right to foreclose on the property.
    Answer Applies to: Colorado
    Replied: 3/5/2014
    Steele, George, Schofield & Ramos, LLP
    Steele, George, Schofield & Ramos, LLP | Alan E. Ramos
    If you file a bankruptcy petition, your personal liability for the loan will be discharged. However, the lien securing the loan will still be on the property and will have to be paid by someone (they could foreclose or demand payment in full at the time of a sale or refinancing). You should discuss this situation with an attorney before filing a bankruptcy petition.
    Answer Applies to: California
    Replied: 3/5/2014
    GARCIA & GONZALES, P.C.
    GARCIA & GONZALES, P.C. | Richard N. Gonzales
    I am assuming two mortgages on the home - a first mortgage and a second mortgage you refer to as the home equity line of credit. You would be relieved of the obligation to repay the 2nd mortgage, but it would remain a lien on the home. The 2nd mortgage lienholder can foreclose on their loan (which is highly unlikely), but they could not look to you for payment. Assuming your husband signed on this obligation, he would still be liable on the loan.
    Answer Applies to: Colorado
    Replied: 3/5/2014
    The Law Office of Darren Aronow, PC
    The Law Office of Darren Aronow, PC | Darren Aronow
    You will not be liable for the debt but it will remain a lien on the house.
    Answer Applies to: New York
    Replied: 3/5/2014
    Paul Stuber, Attorney at Law
    Paul Stuber, Attorney at Law | Paul Stuber
    A chapter 7 bankruptcy would relieve you the need to pay on the loan. It stays on the property as a lien with whatever rights it was given at the time it was signed and recorded.
    Answer Applies to: Colorado
    Replied: 3/4/2014
    Garner Law Office
    Garner Law Office | Daniel Garner
    Your obligation on the home equity loan will be discharged in your bankruptcy.
    Answer Applies to: Oregon
    Replied: 3/4/2014
    Law Offices of Linda Rose Fessler | Linda Fessler
    Be sure to put both loans on bankruptcy and do not pay on either one and do not reaffirm them.
    Answer Applies to: California
    Replied: 3/4/2014
    Meister & McCracken Law Firm, PLLC | Joanne M. McCracken
    This question would require more facts for a specific answer. If you and your husband are both responsible for paying the home equity loan, the creditor will seek payment from him. if you are the only responsible party, the creditor could foreclose on the house. If you were ordered to make the payments as part of a divorce or separation agreement, you most likely must continue to pay them. You need to discuss all this with a bankruptcy attorney as there are facts involved that may lead to a different answer.
    Answer Applies to: Arkansas
    Replied: 3/5/2014
    Law Office of Lynnmarie A. Johnson
    Law Office of Lynnmarie A. Johnson | Lynnmarie Johnson
    You can reject your interest in the home in a Ch. 7, assuming that you are willing to give up the home if your husband stops paying the payments. You have to be very careful how you do this, I would advise talking to an experienced bankruptcy attorney. This is not a simple do it yourself bankruptcy.
    Answer Applies to: Michigan
    Replied: 3/4/2014
    Law Offices of Eric W. I. Anglin
    Law Offices of Eric W. I. Anglin | Eric W. I. Anglin
    If you intend on keeping the house you will need to reaffirm the home equity loan. If you are not keeping the house then you would not need to keep paying the home equity loan. If your husband is keeping the house then he would need to pay both the mortgage and the home equity loan. It is important that you make sure that your divorce decree does not hold you responsible for the home equity loan.
    Answer Applies to: Indiana
    Replied: 3/4/2014
    Law Office of Mark B. French
    Law Office of Mark B. French | Mark B. French
    Home equity loans are typically "non-recourse" meaning that if you do not pay them back the lender can take your house, but not otherwise collect from you. A bankruptcy will not remove the lien that the lender holds on your home. Thus there is typically little to gain with regard to a home equity loan by filing for Chapter 7 relief. You do not have any personal liability to discharge and the lien on your home will not be discharged in a Chapter 7 proceeding.
    Answer Applies to: Texas
    Replied: 3/4/2014
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