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cfortunato
cfortunato, Attorney
Category: Bankruptcy Law
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Experience:  Bankruptcy professor.
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If your home equity company charged off your loan but still

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We filed chapter 7 last year. Our home is under water on the 1st mortgage and our home equity company charged off their loan for $95,000. We are considering filing chapter 13 to remove the home equity lien. We do not understand how the lien works since it was charged off. Does the lien stay on forever for the loan value of $95,000 and can you petition the court to remove the lien outside of filing chapter 13 given we are under water and they charged it off?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 4 years ago.
Hi JACustomer,
A lender cannot charge off a loan and also get a lien based on the loan. Are you sure there is a lien on your home even though the loan was charged off?
Was the home equity loan included in the bankruptcy petition?
Customer: replied 4 years ago.
The home equity loan lender was listed as a secured creditor. We are having our attorney do a title search to confirm the liens. Our lender charged off the loan after we filed the 7 but before it was dismissed. We spoke with them today and they confirmed they charged off the loan. How would I confirm they charged off the loan because we have not received anything in writing?
Expert:  cfortunato replied 4 years ago.
The loan company will not usually send notice that the loan was charged off. However, the loan charge-off may be on your credit report. In most states, you can get one free copy each year (from all 3 credit bureaus) at www.annualcreditreport.com.
And whether or not the loan was charged off, the bank cannot have a lien if the loan was discharged in the bankruptcy proceeding.
Customer: replied 4 years ago.
We checked the credit report and the loan shows it was included in the bankruptcy and was charged off. Our attorney said thelender can still have a lien. Once we get the title search done and if it shows the lien, what do you recommend we do to remove it?
Expert:  cfortunato replied 4 years ago.
Before a creditor can get a lien, that creditor must get a judgment from court. To have the lien removed, you have to go to the court that issued the judgment and file a Motion (usually an "Order to Show Cause") to Vacate a Default Judgment, based on the fact that the underlying debt was discharged in a bankruptcy proceeding.
This is generally an easy process, and you should be able to do it yourself.
cfortunato, Attorney
Category: Bankruptcy Law
Satisfied Customers: 8023
Experience: Bankruptcy professor.
cfortunato and other Bankruptcy Law Specialists are ready to help you
Customer: replied 4 years ago.
Thank you so much. This was my first time to use your service and will definitely use it again. I will accept you answer.
Expert:  cfortunato replied 4 years ago.
You're welcome! And thank you for accepting my answer!
Customer: replied 4 years ago.

I have a very specific question.
The creditor who I spoke with said to me it was charged off, that there was really nothing to do.
But they also said we could present an offer they would present to the Mgrs.
I dont see how that would help us out at all at this point. the damage is done.

But we have the 3 credit reports and are not clear about the "charge off"
Can we request a statement from them showing that was charged off?

That would seem to be the information we woul need to file a "order to show cause"

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