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Ellen, Attorney
Category: Bankruptcy Law
Satisfied Customers: 36714
Experience:  Bankruptcy Lawyer. Experienced.
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We recently filed for bankruptcy this past April. Our attorney

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We recently filed for bankruptcy this past April. Our attorney said we didn't make enough money to qualify for Chapter 13 so we did a 7. We had credit card debt and a HELOC. Everything but the HELOC was discharged in July. We are current on our mortgage payments. Our attorney told us not to pay the HELOC because in many cases after 5 years the bank will write it off as a loss. Our house is worth less than what we owe on the first, so we were told the 2nd is basically an unsecured loan. I am still concerned as to what to do if the bank holding the 2nd comes after us for payment.
Thank you.

I am the JustAnswer expert that will be helping you today. I am a lawyer with 25 years experience. Although I am not your attorney, I hope that I can give you helpful legal information.

If you do not make payments on your HELOC, the lender may foreclose on the property. This is true despite the fact that you filed a chapter 7 bankruptcy and received a discharge. Your bankruptcy would have discharged any personal liability associated with the HELOC but does not remove the lien
Customer: replied 7 years ago.

We are current on our first, so it seems if the second forecloses they will take a huge loss. Here are the numbers, we owe $311,000. on the first. Our home is valued at appproximately $240,000. We owe $98,000. on the second. If they foreclosed, wouldn't it be disadvantageous to them?

yes it would appear disadvantageous for the 2nd to initiate a foreclosure in this market.
Customer: replied 7 years ago.
So we could be at a stalemate until the statute of limitations is up on the 2nd?
that is a fairly accurate way to state it
Customer: replied 7 years ago.
I have one last question. Does statute of limitation apply to HELOCs?
There is a 4 year statute of limitations for breach of contract that may apply.
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