About continuing HELOC payments after Chapter 7
Date: Wed, 04/22/2009 - 08:35
I'm in the middle of a Chapter 7. We are NOT reaffirming our primary mortgage loan nor the HELOC. The HELOC loan was made from a different bank than the 1st lien.
From what I understand, by not reaffirming, we are basically surrendering the property in the Chapter 7. We owe 100k on the HELOC but if the home were sold, the HELOC would possibly only get 25k back.
We are current on payments on both our primary mortgage and the HELOC. I heard that if you keep making the payments, and even though we surrendered the property in the Chapter 7, they mortgage banks are happy and continue to let you live in the home. Of course, fall behind, and they will force the home into foreclosure.
Now, so, my HELOC only has a minimum payment of "interest only" until about 10 years into the loan. I was thinking that just to keep them happy, to NOT pay over the minimum required interest payment for each month because in essence, it's just throwing away your money if you pay down the principal on the HELOC.
Really, at any point, since one surrenders the property, the mortgage loan + HELOC comes off your credit reports (you have no legal obligation to pay them). Of course, the banks still have a (secured) lien on the property (why you gotta keep making payments).
Anyways, if anyone is in my situation, those are just my thoughts: paying just the minimum on the HELOC but don't waste money trying to pay down the principal on the HELOC.
From what I understand, by not reaffirming, we are basically surrendering the property in the Chapter 7. We owe 100k on the HELOC but if the home were sold, the HELOC would possibly only get 25k back.
We are current on payments on both our primary mortgage and the HELOC. I heard that if you keep making the payments, and even though we surrendered the property in the Chapter 7, they mortgage banks are happy and continue to let you live in the home. Of course, fall behind, and they will force the home into foreclosure.
Now, so, my HELOC only has a minimum payment of "interest only" until about 10 years into the loan. I was thinking that just to keep them happy, to NOT pay over the minimum required interest payment for each month because in essence, it's just throwing away your money if you pay down the principal on the HELOC.
Really, at any point, since one surrenders the property, the mortgage loan + HELOC comes off your credit reports (you have no legal obligation to pay them). Of course, the banks still have a (secured) lien on the property (why you gotta keep making payments).
Anyways, if anyone is in my situation, those are just my thoughts: paying just the minimum on the HELOC but don't waste money trying to pay down the principal on the HELOC.
Question....Why is it that you are not reaffirming on your first
Question....Why is it that you are not reaffirming on your first and second mortgage? It doesn't make sense. Especially since you have made the payments on time.
The other thing, just because you surrender the property doesn't mean it no longer reports on your credit. It will continue to stay on your credit for the next 7 years. The other thing, surrendering the home does not mean that you walk away not owing a thing. If you are including the home in Bankruptcy then your fine. However, some banks will come after you for their loss. Meaning, the house sold less than what you owe. It's happening alot today. But then again, if you are including it in BK then you don't have to worry about that.