cfortunato : Hi - my name is XXXXX XXXXX I'm a Bankruptcy attorney here to assist you.
cfortunato : Are you still living in the home?
Customer: 7 and yes
cfortunato : Thank you for your response.
cfortunato : Since the home equity loan was discharged in your Bankruptcy, you are no longer legally liable to pay that loan.
cfortunato : However, a Chapter 7 Bankruptcy can only discharge the debt, it cannot remove the lien the home equity company has on your home.
Customer: what about all the money I paid to them and they never told me any different
Customer: there is no lien I have been paying them...
cfortunato : This means if you stop paying, the home equity company can eventually foreclose the home.
Customer: but there is no record on my credit report of me making payments foe the last 5 years
cfortunato : The home equity loan company keeps track of your payments, which cannot show up on your credit report.
cfortunato : Once a Bankruptcy is filed, subsequent activity on the account cannot show up on your credit report.
cfortunato : You are allowed to continue to pay, and the company is allowed to accept payment from you, but those payments are not allowed to be put on your credit report.
Customer: they said I never reaffirmed the account..which I thought if I kept paying them I did not have to.but also my credit rating is down because of minimal installments and that is one
Customer: how can the balance on my credit report be zero then
cfortunato : Because you are no longer legally liable to pay the loan.
Customer: how can they foreclose then
cfortunato : Because your home was used as collateral for the loan.
Customer: this is confusing...so no record of this discharged and they could still take my home,if I don't pay this even though I am not liable to pay it
Customer: the loan was discharged
cfortunato : I am sorry this is confusing. But what you said is correct - the home equity loan company would eventually be able to foreclose if you stopped paying, even though you do not have to pay.
cfortunato : Do you also have a mortgage on the home?
cfortunato : What is the balance on the mortgage, and what is the current market value of your home?
cfortunato : Also, are you still paying the mortgage?
Customer: 18000and approx. 50000
cfortunato : Thank you again for your response.
Customer: yes and that was not included in the bankruptcy I think
cfortunato : Unfortunately, since your home is worth more than the balance on the mortgage, the home equity loan company would be able to foreclose right away if you stopped paying the home equity loan.
cfortunato : So, the home equity loan company would not be able to sue you for the balance of that loan, because it was discharged, but they would still be able to foreclose the house.
Customer: what good did it do to have this discharged in the bankruptcy then
cfortunato : The only benefit to having the loan discharged would have occurred if you did not want to keep the house.
cfortunato : Since you want to keep the house, there was no benefit to having the loan discharged.
Customer: but I would still owe them
cfortunato : You do not have to pay what is owed if you do not want to keep the house.
cfortunato : You only have to pay if you want to keep the house.
Customer: okay just sucks no proof of payment yes but if I sold it I am sure they would want their money..yes?
cfortunato : Yes - if you sell the house, you will have to use the sale proceeds to pay off the loan.
Customer: you can understand my concern seeing a zero balance and still paying for something especially with no help in re-establishing my wounded credit you have been very helpful thank-so much..have a great day!!!:)
cfortunato : You're welcome!
cfortunato : And I do understand your concern, as what is happening to you happens to may others.