HELOC I need to use but planning Chapter 7 this July

[Kansas1960]

I have a HELOC with a zero balance. I can borrow up to 17,000. If all goes as planned I will file Chapter 7 in July. My driveway is in such poor condition that my basement floor leaks when it rains and it needs to be replace which will cost $6,000. The fence in my backyard is falling apart and I need it fixed since I have a pool and liable if some kid walks into my yard and drowns. This wil cost about 1500. I expect about 3,000 back in March from tax refund. Since it is winter in Kansas I cannot do this until probably April or May. Can I do this without any questions from a trustee? Any advice would be appreciated

[relief13035]

According to my attorney, the HELOC is not dischargable in Chapter 7 since it is a secured loan on the house. Since I am not surrendering my house that means I am stuck with the HELOC.

The weird thing though is that I pulled my credit report and the HELOC is showing zero balance and closed. My primary mortgage is showing open and current. I would be jumping for joy if it was discharged - wishful thinking though.

[Flamingo]

According to my attorney, the HELOC is not dischargable in Chapter 7 since it is a secured loan on the house. Since I am not surrendering my house that means I am stuck with the HELOC.

The weird thing though is that I pulled my credit report and the HELOC is showing zero balance and closed. My primary mortgage is showing open and current. I would be jumping for joy if it was discharged - wishful thinking though.

It's not discharged...it never makes sense to pull your credit reports until at least three months after discharge and then start cleaning up cause all sorts of stuff goes on and can cause unnecessary worry and attempts to clean up reports too early. Your HELOC will probably be showing differently on there by that time.

[TEW]

I have a HELOC with a zero balance. I can borrow up to 17,000. If all goes as planned I will file Chapter 7 in July. My driveway is in such poor condition that my basement floor leaks when it rains and it needs to be replace which will cost $6,000. The fence in my backyard is falling apart and I need it fixed since I have a pool and liable if some kid walks into my yard and drowns. This wil cost about 1500. I expect about 3,000 back in March from tax refund. Since it is winter in Kansas I cannot do this until probably April or May. Can I do this without any questions from a trustee? Any advice would be appreciated

Are you planing on keeping the house? Are you going to make payments on the loan?
Aas long as you don't intend to commit fraud I think there is not harm in what you want to do.

[HHM]

Yes you can do it and not effect your BK as long as you realize you will have to make the payments. thus, it is more of a financial decision than anything related to the BK itself.

[Kansas1960]

No fraud intended. I am not expecting this to be discharged. I just don't see I will have any way to get a loan after BK so I may as well do it before. I plan I staying here for possibly the rest of my life. I just wanted to know if the trustee will question why I did this when I was insolvent. I mean, I could have used this money to pay back credit cards but know that would be unwise. I have to get this fixed before it ruins my foundation. Will I get in trouble for using my HELOC to fix this and do chapter 7 a few month later?

[keepmine]

No fraud intended. I am not expecting this to be discharged. I just don't see I will have any way to get a loan after BK so I may as well do it before. I plan I staying here for possibly the rest of my life. I just wanted to know if the trustee will question why I did this when I was insolvent. I mean, I could have used this money to pay back credit cards but know that would be unwise. I have to get this fixed before it ruins my foundation. Will I get in trouble for using my HELOC to fix this and do chapter 7 a few month later?

There is no fraud here. It's a perfectly reasonable use of funds to repair and maintain your home.

[Flamingo]

No fraud intended. I am not expecting this to be discharged. I just don't see I will have any way to get a loan after BK so I may as well do it before. I plan I staying here for possibly the rest of my life. I just wanted to know if the trustee will question why I did this when I was insolvent. I mean, I could have used this money to pay back credit cards but know that would be unwise. I have to get this fixed before it ruins my foundation. Will I get in trouble for using my HELOC to fix this and do chapter 7 a few month later?

You may want to check the value of your home compared to your first mortgage and HELOC (you state you only have $17,000 available on that equity credit line). Will taking any more money out put you over the total value of your home since home values have substantially declined? That could be an issue with your HELOC lender and they could pull any remaining credit you have if you are doing bad financially now and they get wind of it when you attempt to obtain funds from your HELOC. Do your homework on all that before you proceed...

[Kansas1960]

Home values in Kansas never did rise like the rest of the nation so they have not fallen that much. I have plenty of equity to use the whole 17,000 and then still have 20% equity left.

[Flamingo]

Home values in Kansas never did rise like the rest of the nation so they have not fallen that much. I have plenty of equity to use the whole 17,000 and then still have 20% equity left.

Sounds like you might not be able to file a Chapter 7.

[Kansas1960]

I will be able to file Chapter 7. Home in Kansasa are exemempt.

[Flamingo]

I will be able to file Chapter 7. Home in Kansasa are exemempt.

Then you should have no problem; most of us on here try to point out all we can if we might see issues that could arise because there could always be that issue that jumps out unexpectedly to cause problems; best thing to always do is go over everything with your attorney...speaking of Kansas, I lived in Junction City, KS for two years back in the 70's and my middle daughter was born at Fort Riley, KS. Cool state and I might have the chance this coming summer to go back and visit.