Bankruptcy -chapter 7-can a heloc be added while the primary mortgage is paid to keep the house?
Answer:
Bankruptcy Explained
http://www.debt-explained.com/category/h.
Good question.
Chapter 7 bankruptcies are limited to unsecured debt only. Since your HELOC is secured by your home, you would be responsible for repayment and you cannot under any circumstance include it in your chapter 7 bankruptcy.
Chapter 13 bankruptcies can include mortgage arrearage (back payments owed in a mortgage) but even in that instance you are limited to including only delinquent amounts due, and you have to repay your debt in a chapter 13.
Of course speak with your lawyer about the matter to get a final answer.
the HELOC is tied to the house..they could foreclose on you!! This is the very reason most advisors don't recommend moving credit card (unsecured debt) to a home refi or equity line. Unsecured debt is dischargable.Secured debt has to be surrendered (including the house) if you don't pay it.
OK, this is something to address to your attorney and could be a great reason to file a chapter 13. In a chapter 13, you would pay back all of your secured creditors 100%, while unsecured creditors get paid back a portion, based on your income, expenses and nonexempt property, if any exist. If you have a HELOC that is wholly unsecured, in other words, if the first and second mortgages take up all of the value of your house then the HELOC is wholly unsecured, even if it lists the house as collateral. That lien, as well as others, can be avoided through a chapter 13 bankruptcy.
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