reaffirming a HELOC

[bejam]

Does anyone know about reaffirming a HELOC? We are not behind on our payments for mortgage or HELOC and didn't think I could get the HELOC discharged because it's a secured lien on my house but I'm beginning to question. The bank wants me to sign a reaffirmation but I checked and maybe since my house is not worth much and comes under the 40,000 exemption and repaying the HELOC is a hardship...etc. Can I possibly get it discharged?

341 meeting in 2 weeks
bejam

[lrprn]

Since the HELOC is secured with your house as the security, the two ways to get out from under the HELOC right now is (1) to ask your trustee for permission to sell your house and hope you get enough to pay the HELOC (and any other mortgages) off, or (2) surrender your house to foreclosure. If you sign a reaffirmation knowing you can't afford the payments, you are setting yourself up because if memory serves me correctly, you can't discharge a reaffirmed debt. Don't make the reaffirmed payments and you will lose your house to foreclosure anyway. You don't have to sign a reaffirmation - as long as you or the trustee makes the payments on time, the bank should leave you alone. However, if you miss a payment or two and haven't reaffirmed, that does open the door to foreclosure actions. Only you (and your lawyer if you used one for your Ch 7) can make the decision about what's best for you in your situation.

I don't remember anyone here or online elsewhere ever sharing that a secured debt was discharged just because paying it back was a hardship and the debtor then got to keep the house owing nothing. The secured loan system just doesn't work that way. Don't pay, you will lose the house eventually.

[bejam]

reaffirming a HELOC

Does anyone else have any experience or knowledge of the possibility of getting a HELOC discharged while keeping the 1st mortgage and therefore the house?

The HELOC bank people sent me reaffirming papers to sign where the interest is up almost 2% more than my original agreement. If it cannot be discharged under any circumstances under the sun (as long as we intend to keep the house), then if we don't sign the reaffirminmg papers and just keep paying as always, Won't the original terms simply continue to apply?

bejam

[kcj]

We didn't reaffirm out HELOC. But we do still pay it.
FYI, my hubby forgot the payment a couple months ago and they called our lawyer about it a couple weeks after it was due. I guess our file is in the BK department and not the regular banking departments, so they keep a close eye on the payments.

[Interlaw]

Does anyone know about reaffirming a HELOC? We are not behind on our payments for mortgage or HELOC and didn't think I could get the HELOC discharged because it's a secured lien on my house but I'm beginning to question. The bank wants me to sign a reaffirmation but I checked and maybe since my house is not worth much and comes under the 40,000 exemption and repaying the HELOC is a hardship...etc. Can I possibly get it discharged?

341 meeting in 2 weeks
bejam

You are not required to reaffirm debt secured by your home, and there is little advantage to you in signing the reaffirmation. So long as payments are kept current, you're fine.

Brett Weiss
[email protected]

https://www.brettweiss.com/bankruptcy

Maryland, DC and Federal bars
Member, National Association of Consumer Bankruptcy Attorneys

--> Read our Bankruptcy FAQ at www.brettweiss.com/bankruptcy/FAQ/br_faq.htmwww.brettweiss.com/faq/br_faq.htm.

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The Small Print: This response is for discussion purposes only.
It isn't meant to be legal advice and you shouldn't treat it as
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