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Ellen
Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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I have a Home Equity line of Credit againist my home instead

Customer Question

I have a Home Equity line of Credit againist my home instead of a mortgage, Can I short sale or get a deed of lein with-out the Company(American General Finance Co) suing me for the Balance?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  Ellen replied 5 years ago.
Welcome!

I am an attorney with 25+ years of legal experience and am working diligently on your answer while I await your response.

Please tell me:
What state is the property located in?

Thanks!
Customer: replied 5 years ago.

 

I am in Arizona.

 

Expert:  Ellen replied 5 years ago.
Hello,

So sorry to hear of your dilemma. I will strive to provide you with legal information to assist you. If my answer is not clear to you, I encourage you to ask me for clarification by using the reply button.

Unfortunately when a property is foreclosed in Arizona, a judgment can be entered by the court for any amount of the home equity loan that remains unpaid. This is called a deficiency judgment. The deficiency judgment can be used to execute on other property and wages of the borrower.

A "deed in lieu of foreclosure" is usually only available when there is one lien on the house. Since you have a home equity loan and the first mortgage, it is unlikely that you will be able to a deed in lieu of foreclosure.

A short sale would require the consent of both lienholders.

Ellen and other Bankruptcy Law Specialists are ready to help you
Customer: replied 5 years ago.
Hi Again I guess I need to be more clear I am sorry. O.K. We owned this home at one time. Then we took out a line of credit 3 differnent times at which with each time they would pay off the first loan (not Mortgage) then open and lend us more untill the last time at which they closed the line of credit. So there is no 1st mortgage or 2nd. I think at the last paper work we signed i asked them was this now a mortgage and they said yes but I dont think it says that on the paper-work. Now can we file for Bankrupcty and keep this home?
Customer: replied 5 years ago.
I didnt accept your answer I am sorry I hit the wrong button. Help me i dont do COMPUTERS > I HATE THIS STUFF. Can You Please Help Me
Customer: replied 5 years ago.
Again there is onle one lein on this home which is with American General Finance and when we took out the first line of credit we owned this home free and clear. Then we needed more so they pd off the first loan (they meaning American Gen again) and wrote us a new loan and we pulled out more and then we did this a 3rd time at which they said the line of credit is now closed and I asked them was it now a mortgage and they said yes but I dont think the paper-work says it. Again can we File Bankrupcty and Save our home and ourselfs?
Expert:  Ellen replied 5 years ago.
Hello,

Thank you for your clarification

A bankruptcy would discharge your personal liability on the home equity loan but not the lien on the property. This means if the property were to be foreclosed, the lender could sell the property to satisfy the debt but could not obtain a judgment against you for the unsatisfied portion of the debt. However it also means that you cannot sell the property without paying the mortgage in full


Customer: replied 5 years ago.

So I can file Bankruptcy and still keep my home? But I am 6 months behind in payments. They also had me fax over my decision on which other program I wanted to try so I asked for a short sale. If they say NO which they will Can I still File Bankruptcy?

Expert:  Ellen replied 5 years ago.
So I can file Bankruptcy and still keep my home? But I am 6 months behind in payments.
You could file a chapter 13 bankruptcy to reinstate your mortgage over a five-year period.

They also had me fax over my decision on which other program I wanted to try so I asked for a short sale. If they say NO which they will Can I still File Bankruptcy?
yes you can


Please let me know if you have any questions concerning my answer.
Customer: replied 5 years ago.
Can they stop or refuse the Bankruptcy? Or if we file is it a sure deal that it will go through and we will get to keep our home if we file chapter13?
Expert:  Ellen replied 5 years ago.
A properly filed Chapter 13 bankruptcy would immediately stop the foreclosure action. It could permit you to set up a plan to reinstate your mortgage arrearages. In other words, it could allow you to pay the arrearage over a 5 year period.

I hope that it helps to know this information

Thank you in advance for remembering to click accept. If you experience difficulty using the accept button, please let me know as JustAnswer pays me for my time only if the "accept" registers.

Customer: replied 5 years ago.
I tried to accept so you would get paid but it says that I have already done so and if i do so again it would cost me more. I really thank-you so much you have really been so helpful during this awlful time in our lives. Thank-you so much. Brenda
Expert:  Ellen replied 5 years ago.
Thank you and best of luck to you