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Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2602
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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I received a chapter 7 dicharge i September of last year and

Customer Question

I received a chapter 7 dicharge i September of last year and was able to keep my home with mortgage now been paid on the 1st of the month. I did however have a equityline of credit, that was included in the discharge. The bank is now trying to foreclose on me. Is there a way to retify this.
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 6 years ago.
Hi janetstar,
Is the HELOC the junior loan (recorded after the mortgage)?
If so, the only way they can foreclose is if there is enough equity in the home to completely pay off the mortgage. Is there enough equity to completely pay off the mortgage?
Customer: replied 6 years ago.

Yes the equity is the junior loan. it is approximately $85000 and I owe 128000on the primary loan. With the price of homes I not sure the value maybe just over $200000. It is a town home in 20705 in MD.

Expert:  cfortunato replied 6 years ago.
A second mortgage or HELOC loan cannot be discharged in a Chapter 7 bankruptcy proceeding, even if the creditor information was included in the petition.
The language in the discharge document that you received at the end of the case says that all dischargable debts are hereby discharged. Of course, this is very misleading, as certain debts (such as certain taxes, student loans, domestic support obligations, etc.) are supposed to be included in the petition, but that does not mean they are discharged.
The only way to deal with problematic HELOC's is to file a Chapter 13 petition.