Home Equity Line Foreclosure? Filing for Bankruptcy?
emartel01 asked: I have a question regarding my Home Equity Line and Foreclosure. If my home is foreclosed what happens to my home equity line? Am I s...
emartel01 asked:
I have a question regarding my Home Equity Line and Foreclosure. If my home is foreclosed what happens to my home equity line? Am I still obligated to pay the home equity line? Or is it part of losing the home?
I have a question regarding my Home Equity Line and Foreclosure. If my home is foreclosed what happens to my home equity line? Am I still obligated to pay the home equity line? Or is it part of losing the home?
I’ve heard that if the mortgage loan and home equity line are together with the same bank, then the whole thing is foreclosed. Is this correct? Can someone please explain?
At this point I just want to get rid of the house and all of the debt. Can I file for bankruptcy and claim my home equity line in bankruptcy? I personally just want to get a fresh start without all of this debt.
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In a foreclosure the first lien-holder is the one that gets the money! Meaning that the equity line is second, they will lose out on getting paid unless the first lien is cleared and there is something left after all the legal expenses of a foreclosure.
If the equity line is with the same lender then the total amount of both will be wrapped together as a loss to the one lien-holder.
If you walk away and let it foreclose, you will still owe any money which the bank lost after the foreclosure/ sheriff sale. It will show as a foreclosure on your credit as well.
You have three choices, which you appear to have already decided on…..
1.) You can walk away and file chapter 7 bankruptcy, get a fresh start and buy again in a couple of years.
2.) Do nothing and the creditors will come looking for you on the remaining balance of the loan.
3.) Do a Short Sale with the lender at which you sale the property for less than you owe and the bank doesn’t have to take the property at foreclosure. It will save your credit from having a foreclosure on it and the bank will accept a lost.
If you decide on number three, get a good Realtor though! It’s work but it can pay off!
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