What happens with Home equity loans and lines of credit if you file bankruptcy?
November 3, 2008 - Would these debts be "forgiven" also and if so, does this affect your house which was used to achieve the loan?
The answer to your question is pretty complicated. I would definitely contact a financial professional and discuss this before making any decisions regarding bankruptcy. The short answer is the debt may be forgiven if it's directly part of your bankruptcy. But you'll still have a foreclosure on your home and the lender of the home equity loan and home equity line of credit could put a lien on your home, but it's doubtful they could force you to sell or leave your home. You'll really need to talk with them about that. Be up front about your situation and see if you can work out a solution in both your best interests. Remember, your credit will be shot for several years after a bankruptcy and it won't help to have a foreclosure as part of your credit history. This is a bad time to have really bad credit. You'll have a lot of difficulty getting loans in this market with terrible credit. If there is any way you can avoid bankruptcy and foreclosing on your equity loans, I recommend taking that route. It will save you a lot of headaches and financial stress down the road.
- lets all forgive and love, like jesus does for us
- it is called foreclosure
- If there is anyone else on these products they will gain the debt, otherwise they will be forgiven. Depending on if you used your house for sercurity will result in you keeping or losing ur home.
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