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Can HELOC Foreclosure after Chapter 7

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    Can HELOC Foreclosure after Chapter 7

    I received alert regarding an inquiry on my credit report. So I called the number on my credit report, got the run around left a message, didn't get a call back. So today I called again and spoke with someone. He told me that they were trying to initiate foreclosure and pulling my credit is one of the things that they have to do to try to foreclose.

    I filed for chp 7 bankruptcy in 9/2009 and discharged 1/2010, the HELOC was included. My 1st lien, the mortgage has been current. There is also a 2nd lien, but no payments need to be paid, it's just down payment assistance that has a lien and needs to be paid back when the house is sold. The HELOC is a 3rd lien. I was making on time payments until 2015 and then stopped. I live in MN.

    Can the HELOC foreclose on the property due to the delinquency?

    #2
    The 3rd has the right to foreclose. Whether or not it will is a question. Since it is in 3rd position, it will take the property subject to the two other mortgage liens. If it fails to service those liens one of them will foreclose.

    A junior lienholder will look at the value of the property and the amount owed that needs to be paid before it gets anything. If there is no equity a junior lienholder will typically not foreclose. But. . . the point is. . . if you are delinquent, the junior lienholder has the right to foreclose.

    Des.

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      #3
      Thanks for the reply Des. I haven't received anything in the mail from the HELOC, it was just a conversation. But I was wondering how this pertains to foreclosure in my State (MN) with a HELOC.

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