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Maverick, Attorney
Category: Bankruptcy Law
Satisfied Customers: 6422
Experience:  20 years of professional experience
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I have a Mortgage and Home Equity on my house with Digital

Customer Question

I have a Mortgage and Home Equity on my house with Digital Federal Credit Union. I have made all my monthly payments on time on both loans every month. Back in 2009 I filed for bankruptcy which was discharged in the spring of 2010. Both the Mortgage and Home Equity were listed on the bankruptcy, and since that time I have continued to make the monthly payments, although they are considered "voluntary".
All this time I have been able to see both loan accounts on my online account with DCU as well as my savings account. I have been able to access statements for them online and make payments to them online. I've had my mortgage with DCU for over 15 years and have never even been late with a payment on it. The Home Equity was taken out in 2008 and I have never been late with a payment on that either.
As of 2 weeks ago, my Home Equity line disappeared from my online account, and I am no longer able to view statements for it or make payments to it online. Both the Mortgage and Savings accounts are still visible online.
When I called DCU customer service to inquire why I was no longer able to view or access my Home Equity loan online, I was told it had been "sent to our collections department." When I asked why it was sent to collections when I had not been late with payments ever, I was told it was because the loan was on the bankruptcy that I filed 6 years ago. The person who spoke with me on the phone was extremely rude, and downright combative when I asked how I was supposed to make payments to it. She said I would have to either mail in the payment or drive to their branch office every month and pay it in person. The closest branch office is over an hour's drive away, and I don't feel comfortable mailing payments that large that can get "lost" in the mail.
I don't understand how a bank can send a loan to collections that is not in default, with no notice or warning or explanation at all. Is this something they can do legally? What about my primary Mortgage? Would they be able to do the same thing with that? Also , how am I now going to be able to keep track of how much I owe on the Home Equity since I don't have access to statements for it any more?
All in all, it doesn't seem like a bank should be able to do this legally with absolutely no reason, no notice, no warning, no explanation, and effectively prevent me from being able to manage my accounts as usual, or even know the status of one of them when it has been in good standing for all these years.
Is there anything I can do legally to get my Home Equity loan back online and ensure that they don't send my Mortgage into collections as well?
Submitted: 1 year ago.
Category: Bankruptcy Law
Customer: replied 1 year ago.
The bankruptcy was a Chapter 7 and I did declare my Homestead when I purchased the house in 2000.
Expert:  Maverick replied 1 year ago.

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Please let me know if you would like for me to assist you with this for a cost of $48.00. I will send you an offer of additional services at that time.

Customer: replied 1 year ago.
I can't afford an additional $48 at this time.
Expert:  Maverick replied 1 year ago.

1. Did you file a chapter 7 or 13?

2. Did you reaffirm the loans?

Customer: replied 1 year ago.
It was a Chapter 7 bankruptcy. I did not reaffirm the loans. However, that was over 5 years ago and the account has been visible online all this time. I don't understand how 1) it can be "sent to our collections department" when it has been in good standing all along, or 2) why after 5 1/2 years they would suddenly make it more difficult for me to make regular payments on the loan and be able to manage it effectively and be able to view the monthly statements for it.
Expert:  Maverick replied 1 year ago.

That explains it. Even if you don’t reaffirm, many lenders will still let you keep the property as long as you make timely payments on the loan. However, because you did not reaffirm the debt it was discharged in the BK. That basically means that your lender can decide to repossess the property at any time even if your payments are timely. The benefit if you did not reaffirm the debt and the lender now repossesses the property, is that it cannot go after you for the deficiency. Liability for the deficiency is also wiped out with the Chapter 7 discharge.

1. So, there is no such thing as the loan being in good standing because the debt was wiped out; it is as if you were renting the property with the only difference being that the title is still in your name until they repossess it;

2. It is not clear; but if I had to guess, they are planning to repossess the home and evict you.

Sorry, I know this is not what you wanted to hear; but I am assuming that you are paying for an honest and professional answer. There is little that can be done under the circumstances as you have been living there only at the goodwill of the lender willing to accept your payments instead of foreclosing immediately upon the chapter 7 filing.

Customer: replied 1 year ago.
Does my Homestead declaration give me any protection from the property being repossessed? How long does it take for a bank to evict someone in this manner? Do I have any other options here to prevent that from happening?
Customer: replied 1 year ago.
I was suspicious that may be the case, which is why I started this inquiry. Thank you for the honest answers. :)
Expert:  Maverick replied 1 year ago.

1. The homestead protection does not typically protect you from a default on your mortgage.

2. The eviction issue will require some research on my part.

3. As stated before, there is little that can be done under the circumstances as you have been living there only at the goodwill of the lender willing to accept your payments instead of foreclosing immediately upon the chapter 7 filing. There may be some things you can do to delay the eviction but I will need to research that as well.