Expert: Terry Leeders - 11/10/2010

Question
Hello,

First of all, thank you very much for answering my question.

I have a HELOC 2nd loan for $250,000 on my house. I was told by the lender that if I am more than 180 days late, the loan will be charged off and sent to collections.

1)Can the HELOC charge off be wiped out in Chap 7 bankruptcy? and

2)Does the HELOC lien on my house go away when the loan is charged off?

I am planning on filing BK anyway for credit cards, but I was wondering if I should wait until the HELOC charges off so that I can include it, or just do the BK now and deal with the collection company and try to cut a deal with them later.

Thanks again!

Answer
You can discharge the 2nd loan only if you are looking to walk away from the home, as the lien will stay on the title.
You cannot sell or transfer the house without paying off the loan.

If you wish to keep the home, you'll need to keep paying this.
sorry.
thanks for your question, good luck.