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WALLSTREETESQ
WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15640
Experience:  14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
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After I have my chapter 7 bankruptcy discharged, will it make

Customer Question

After I have my chapter 7 bankruptcy discharged, will it make it harder to get a home equity loan; or, while it just make the loans have a higher interest rate.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 1 year ago.

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on

WALLSTREETESQ :

A chapter 7 would have lowered your credit score by 200 points, so in terms of an equity loan, it would be difficult to get, however

WALLSTREETESQ :

not impossible, typically after 6 months of discharge, you can be approved for an equity loan, but will face high interest rates,

WALLSTREETESQ :

since this is an equity loan, and it will be based upon your collateral

WALLSTREETESQ :

obtaining a loan will be possible, if you can show steady income as well.

Customer:

If I get a home equity loan instead of getting a chapter 7, and I pay my credit cards off that way, How will that affect my credit?

WALLSTREETESQ :

that would be better for your credit,

WALLSTREETESQ :

however you lost much of the money from your home to pay debts, which may not be a good option, if you can wipe all debts out through a chapter 7

Customer:

I see. If I got a home equity loan and paid off my credit cards, would the credit cards lower or raise or stay the same as far as credit limits?

WALLSTREETESQ :

They may go lower or be charged off, they will not increase

Customer:

So why would the credit cards be charged off if I paid them off with the money from my home equity loan?

WALLSTREETESQ :

it would depend on whether you ever defaulted,

WALLSTREETESQ :

if you never defaulted, the limit would stay the same, if you have missed payments,

WALLSTREETESQ :

they may cancel the debts, after they are paid off, also, you can all each one, and try to settle the balance for 50% or less

WALLSTREETESQ :

if you have never defaulted or missed a payment,

WALLSTREETESQ :

they would not charge off the debt or cancel the credit cards,

Customer:

Would my credit score go down if I never missed a payment on my credit cards, and I paid them off; but now I had a home equity loan of $30,000 on my credit report with low or no balances on my credit cards?

WALLSTREETESQ :

no, if you have not missed a payment,

WALLSTREETESQ :

the equity loan would not hurt your score,

WALLSTREETESQ :

as long as you paid it on time, your score may even increase.

Customer:

ok. If I got a home equity loan, paid it on time, paid my credit cards on time, but in a year or two I could no longer pay the debts, could I still apply for Chapter7 bankruptcy?

WALLSTREETESQ :

yes, you can file bankruptcy,

WALLSTREETESQ :

taking the equity loan would not hurt you.

Customer:

Could I still file a chapter 7 with a home equity loan, or would they put a lien on the house for the home equity loan?

WALLSTREETESQ :

you can file with the equity loan,

WALLSTREETESQ :

in a chapter 7 your other debts would be discharged, as long as you pay the equity loan

Customer:

Would I need to file a different type of bankruptcy? I live in Maryland and I do not know if that matters or not?

WALLSTREETESQ :

if your income is above the state median you may have to file a chapter 13,

WALLSTREETESQ :

but if your income is limited, a chapter 7 would be possible,

WALLSTREETESQ :

also, in Maryland, you would have certain exemptions, for property

Customer:

My house is worth 80000 dollars-could I exempt all of that?

WALLSTREETESQ :

You can look at the Maryland bankruptcy exemptions at the link above.

WALLSTREETESQ :

no,

WALLSTREETESQ :

Under the Maryland exemption system, homeowners may exempt up to $21,625 of their home or other property covered by the homestead exemption.

WALLSTREETESQ :

So if you have a mortgage that cover 60,000 you can exempt the 20,000

WALLSTREETESQ :

Maryland also has a “wildcard” exemption that you can use to protect up to $6,000 in any property. You can combine the wildcard and homestead exemptions to protect up to $27,625 in your home.

Customer:

I own my house outright. I live in Baltimore city. How would that affect my chapter seven Would they be able to to put a lien on my house?

WALLSTREETESQ :

they can force a sale of the home to pay creditors,

WALLSTREETESQ :

as only a small amount is exemopted

WALLSTREETESQ :

exempted

Customer:

ok, that is what I was afraid of. But if it is just credit card debt, which is unsecured, could they still force a sale.

WALLSTREETESQ :

it is possible but rare,

WALLSTREETESQ :

it may be best for you to obtain an equity loan, and settle the credit cards, for 50% or less

Customer:

ok, thanks. that answers my question.

WALLSTREETESQ :

Good luck,

WALLSTREETESQ :

and if you have any further questions please do not hesitate to ask

WALLSTREETESQ :

If satisfied please provide us with positive feedback

Customer:

you got it.

WALLSTREETESQ :

Thank you

WALLSTREETESQ, Attorney
Category: Bankruptcy Law
Satisfied Customers: 15640
Experience: 14 years exp., CH 7 AND 13 Bankruptcy cases, AFL-CIO UNION PLUS, UFT NYSID AND ALL MAJOR UNIONS
WALLSTREETESQ and other Bankruptcy Law Specialists are ready to help you

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