Kathy asked:
I’m in California, I bought the house in July 2005, REFINANCED in July 2006 then stop paying in February 2007 because my mom passed away and I couldn’t afford the payment, insurance and taxes all by myself. My house is now foreclosed. The bank took possession on October 2006. Countrywide continues to send me statement on the HELOC. Does this means that I still have to pay for the HELOC?? I didn’t even take any money from it. It was used to pay for the rest of my original loan when I refinanced. Can I file bankruptcy particulary chapter 7 for the HELOC??
NO! My mother is not on the mortgage. She helped me with it because I bought it for her… she couldn’t qualify.
I meant to say “NO! My mother WAS not on the mortgage. She helped me with it because I bought it for her… she didn’t qualify.”
I’m in California, I bought the house in July 2005, REFINANCED in July 2006 then stop paying in February 2007 because my mom passed away and I couldn’t afford the payment, insurance and taxes all by myself. My house is now foreclosed. The bank took possession on October 2006. Countrywide continues to send me statement on the HELOC. Does this means that I still have to pay for the HELOC?? I didn’t even take any money from it. It was used to pay for the rest of my original loan when I refinanced. Can I file bankruptcy particulary chapter 7 for the HELOC??
NO! My mother is not on the mortgage. She helped me with it because I bought it for her… she couldn’t qualify.
I meant to say “NO! My mother WAS not on the mortgage. She helped me with it because I bought it for her… she didn’t qualify.”
I’m not exactly certain, but I think you may have to file a different form of bankruptcy (chapter 11 maybe?). Get some advice from a financial specialist and get the forms going ASAP as it will ruin your chances at a mortgage or car loan for years…
First and foremost was your Mothers name on the mortgage? If it was then the whole morgtage should have been paid by the loan insursance.at the time of her death. The bank may be srewing you big time. Check this out first please…. Not all banks are honest. someone at the bank may be prospering from your loss, check it out if you are being taken advantage of contact the police and get some justice..
You in actuality DID borrow from the HELOC if you used it to pay for the rest of your original loan when you refinanced. That’s why it exists. But yes, if you don’t even have the property anymore, filing a chapter 7 is a good idea unless you want to be pursued for the next 10 years or so to pay it off.
You should consult a bankruptcy attorney.
The HELOC is like a credit card but secured by your home. It is not very different from a loan in the end because it is secured. Even if it is foreclosed and the collateral is no longer securing the loan, the loan exists. Just as you will owe money after the foreclosure due to the cost of foreclosure and the difference between the selling price and the funds owed, you will also owe the HELOC balance. If you want to erase the debt, you will need to file bankruptcy, which will effectively write off all your debts unless you reaffirm a debt (meaning you tell the courts you want to keep that debt – such as your car loan for example.)