Was the HELOC discharged in the Bankruptcy?
If not, when was the last payment on this account?
If the trustee abandoned the house, there was probably not enough equity for the lien. This means the lien could have been "avoided" (removed) in the Bankruptcy. If there is a lien on property when a Bankruptcy case is filed, a separate "Lien Avoidance" proceeding must be done to remove the lien. This is because a Bankruptcy - alone - cannot remove a lien, it can only discharge the debt that resulted in the lien.
If it there was no separate Lien Avoidance proceeding in your Bankruptcy, you can have the Bankruptcy case re-opened now for the purpose of filing a motion to have the lien avoided.
Otherwise, considering the fact that you can do this, a settlement offer of $1,000 - $5,000 to the lender to remove the lien would be reasonable.
I think this is what you wanted to know. If not, please let me know.Thank you!
Thank you for accepting my answer!
However, I just realized I gave you an incorrect answer. A HELOC is treated the same way as a second mortgage (even if it is the third loan secured by the house), and a lien for this cannot be avoided in a Chapter 7 Bankruptcy (only in a Chapter 13).
However, because you have no legal obligation to pay the HELOC, a settlement offer of $1,000 - $5,000 is still reasonable, since you do legally have to pay anything, and can file a Chapter 13 at some point in the future (4 years after the Chapter 7).
I apologize for the misinformation, and any confusion it may have caused.
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