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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2870
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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Im filing chapter 7 bankruptcy. I am trying to keep my house

Customer Question

I'm filing chapter 7 bankruptcy. I am trying to keep my house (had the homem loan reconfigured). I have a HELOC also. I have not missed a house payment or HELOC payment. Do I have to reaffirm the HELOC to keep my house, or can I just continue to make the monthly payments?
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 6 years ago.

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

When you do chapter 7, if you wish to keep the loan alive, then yes, you should reaffirm the mortgage/heloc. otherwise, it will discharge in the bankruptcy case.

Terry L. :

The lien will remain on the property if so, but the lender cannot collect

Terry L. :

they can foreclose if there is enough equity though.

Terry L. :

you would need to pay off the loan if you ever wish to sell or refinance it

Terry L. :

reaffirmations are not required in the bankruptcy case though, so have your attorney weigh the pros and cons for you

JACUSTOMER-i3n1voul- :

What does that mean, discharge? If I don't reaffirm, what will happen? If I do reaffirm, and later have to give up the house, won't I be liable for the full loan amount even if I have lost the house? I don't have an attorney, I can't afford one.

JACUSTOMER-i3n1voul- :

Hello, are you still there?

Terry L. :

yes

Terry L. :

the debt will be eliminated, the creditor cannot collect, but the lien will stay on the home until it is paid.

Terry L. :

if you reaffirm and have to give up the home, you are on the hook for that loan

Terry L. :

if you have any other questions, let me know

Terry L. :

thanks for your question, good luck

JACUSTOMER-i3n1voul- :

so it sounds like it is in my best interests to not reaffirm the loan, but stay in the house. Is that correct?

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