can you cash out a heloc before bankruptcy?

[rjmwx81]

Here in MN Denny Hecker's case is being looked at closely.

It's gotta be pretty sweet being Hecker's trustee, though, since they get paid from the assets of the estate. "Oops, look what I found! ANOTHER quarter of a million dollars you were hiding."

[discouraged]

Here in MN Denny Hecker's case is being looked at closely. He is being openly fradulent - Hey, why shouldn't he be allowed to spend umpteen dollars at a restaurant, even though he claimed he was too brokw for a lawyer and had, yes had, a state paid lawyer.

The sent him to jail, which I believe he rightly deserves. Makes the rest of us - who made mistakes and are paying for it, look like angels.

I guess I am lucky because even before I was 'totally broke', the banks rescinded my Heloc buying power. You have to live with what you do, and getting back at 'them' does not help you.

[AngelinaCatHub]

Rereading the gamete of this thread, I see various opinions and some framed in bitterness.

The REAL bottom line is, what someone or some entity did to you, real or perceived, does not give you license to do wrong.

Once while younger, I got caught speeding (oh no, not that). I asked the cop and explained to him that before he stopped me, I witness a jerk going at least 30 MPH faster than my bitty 10 over. His response was, "I caught you" I can't catch everyone, it does not make him right, but it does not make YOU right either, here is your ticket".

A wise remark I shall never forget. By and by, doing wrong will come around and bite you. Everyone here knows this. Karma or God has a way of remembrance. What you sew, you shall reap. How about sewing flowers, not thorns.

A person's character is "being able to 'get away' with doing wrong, but not doing it for that reason alone".

The answer is very clear in the OP's original post. It is stealing plain and simple. It will bite them in their bk, and those who offer advice to do wrong, are double wrong. My opinion. 'Hub

[forgotten]

EDIT: also, if the house is worth enough for that HELOC to still be "worth" something, withdrawing all the cash up to the FMV of the house is certainly legal. Just sayin'

Only if one had intention of repaying the amount with a reasonable ability to do so at the time of the withdraw.

[onwards]

You know, to add to all this with a bit of a political bent, the democrats won all my independent votes this week when I saw that wonderful, beautiful, heart-warming announcement from BofA where they simply HAD to report a $7.7B loss due to the financial reforms - that is, fees they can no longer rape us for. I was on the fence as I usually am before elections, but this one single announcement cheered me up nicely. The dems did good here. And with the new consumer agency with Ms. Warren, I expect and hope for more of the same.

[onwards]

As Han Solo would say, "That's the real trick, isn't it?" Once the OP realizes he's insolvent, taking out any additional credit would be illegal, whether he gets caught or not.

Sure, sure it is. Tell that to all the folks at the banks who did things that were *quite* illegal and, ah, didn't get caught, all the while laughing at us sheep. AFAIC, if he can get away with it without getting caught, it's legal, ethical, and moral, and the more he can take his bank for, the better it would make me feel to know it's happened. Of course, it's just my personal feeling, not advice of any sort. It's called "outrage", and it hasn't subsided one bit in the last two years. If anything, it has merely gotten hotter.

EDIT: also, if the house is worth enough for that HELOC to still be "worth" something, withdrawing all the cash up to the FMV of the house is certainly legal. Just sayin'

[scorpion35]

I agree - the banks and financial institutions grab all they can with no concern for the individual or even common sense. This economy is proof of that. They play the game to the very edge, and go just over it in hopes of getting away with their actions. They know that if they cheat the system out of 200M and receive a fine of 20M they just made 180M and bonuses are doled out. So, here we are playing by the rules, injecting ethical advice in our threads all while the financial instructions are working to come up with new programs or laws to separate us from our money. I say play the game and play it well.

stop giving bad advice

[tobee43]

Baloney.

If the property is worth less than the combined amount of 1st and HELOC, then the HELOC lender had better not authorize the withdrawal. If they do, and get left holding the bag, it really is their problem.

I have absolutely no compassion for commercial lenders at this point. The way I have been treated - by ALL of them - has made it so that my mindset when it comes to dealing with them moving forward is simple: it's only business. I will use every advantage I can in our transactions with no remorse or care in the world, just like they do. If the OP can legitimately get that money out legally and without landing in hot soup, I will cheer him to go on and do it. And I sincerely hope it's BAC, or Wells, or Citi, or HSBC, or any one of those others that get screwed. The more the merrier.

YOU LEFT OUT CHASE!!! thank you very much...oh let it be CHASE!! LOL...and get the bucks...although i'm certain the bank with halt the transaction in a ny minute! they will be suspicious....unless you do it slow and easy......and let time pass here and there and there again!!!

but fraud by any other name it could be viewed in the eyes of the trustee...it's a toss of the dice with this one!

[rjmwx81]

If the OP can legitimately get that money out legally and without landing in hot soup

As Han Solo would say, "That's the real trick, isn't it?" Once the OP realizes he's insolvent, taking out any additional credit would be illegal, whether he gets caught or not.

[angles]

Baloney.

If the property is worth less than the combined amount of 1st and HELOC, then the HELOC lender had better not authorize the withdrawal. If they do, and get left holding the bag, it really is their problem.

I have absolutely no compassion for commercial lenders at this point. The way I have been treated - by ALL of them - has made it so that my mindset when it comes to dealing with them moving forward is simple: it's only business. I will use every advantage I can in our transactions with no remorse or care in the world, just like they do. If the OP can legitimately get that money out legally and without landing in hot soup, I will cheer him to go on and do it. And I sincerely hope it's BAC, or Wells, or Citi, or HSBC, or any one of those others that get screwed. The more the merrier.

I agree - the banks and financial institutions grab all they can with no concern for the individual or even common sense. This economy is proof of that. They play the game to the very edge, and go just over it in hopes of getting away with their actions. They know that if they cheat the system out of 200M and receive a fine of 20M they just made 180M and bonuses are doled out. So, here we are playing by the rules, injecting ethical advice in our threads all while the financial instructions are working to come up with new programs or laws to separate us from our money. I say play the game and play it well.

[AngelinaCatHub]

No I think it's an honest question. Many, many people view their available HELOC as an asset, because for years the banks have advertised it as "putting your equity to work," "taking cash out of your home," etc...calling it everything but what it is: a loan.

Some people view their credit limit on cards the same way: as money that's there for their use, not as an offer of a loan. That's how a lot of people get into trouble with credit in the first place.

I completely agree. BELIEVE ME, although we thought nothing of doing this, WE were the quintessential idiots in BK law or procedures. We had no reason to ask a question as this, but would have enjoyed the answer for our learning curve.

Depends on timing, legally speaking.

BK filings generally look back 6 months (I think; you better check it). So if it's within that window, you most likely will end up in trouble.

More than that, and it becomes much more tricky for the lender to prove you had fradulent intent. Still, I would certainly ask where that money went and you would need to provide a good explanation - just withdrawing 350K will likely raise some eyebrows, because it doesn't sound like you have significant other assets that might require a big cashflow.

NO, I disagree. In concept you are right. In practice this is "constructive bankruptcy" known as fraud. The look back could potentially be limitless. (past histories, etc.)

The OP is here for a reason. The question (if legit) is a good question. The answer is NO, and if you are even 'thinking' of bk, to pull money out of any credit system is abuse and THEFT. 'Hub

[onwards]

what u are trying to do is called FRAUD
That money is not yours for the taking
only someone of questionable moral values would even consider doing that

Baloney.

If the property is worth less than the combined amount of 1st and HELOC, then the HELOC lender had better not authorize the withdrawal. If they do, and get left holding the bag, it really is their problem.

I have absolutely no compassion for commercial lenders at this point. The way I have been treated - by ALL of them - has made it so that my mindset when it comes to dealing with them moving forward is simple: it's only business. I will use every advantage I can in our transactions with no remorse or care in the world, just like they do. If the OP can legitimately get that money out legally and without landing in hot soup, I will cheer him to go on and do it. And I sincerely hope it's BAC, or Wells, or Citi, or HSBC, or any one of those others that get screwed. The more the merrier.

[onwards]

Depends on timing, legally speaking.

BK filings generally look back 6 months (I think; you better check it). So if it's within that window, you most likely will end up in trouble.

More than that, and it becomes much more tricky for the lender to prove you had fradulent intent. Still, I would certainly ask where that money went and you would need to provide a good explanation - just withdrawing 350K will likely raise some eyebrows, because it doesn't sound like you have significant other assets that might require a big cashflow.

[rjmwx81]

only someone of questionable moral values would even consider doing that

Let's not be too judgmental. There are lots of people who think that declaring bankruptcy at all is immoral. Every situation is different. I still think the OP represents a large number of homeowners who view their HELOC's as "their money" instead of the bank's.

[scorpion35]

My home is securing a commercial building which we are unable to sell and will give back to the bank. For certain they will come after the house. We have a 400k HELOC which we have only used about 50k. Can we cash out the rest before the bank takes the building and eventually the house? What's the legality of it and what can they do to try to get back the money if we have no more hard assets and declare bankruptcy?

Thanks for the advice

what u are trying to do is called FRAUD
That money is not yours for the taking
only someone of questionable moral values would even consider doing that