Charged Off Mortgage and Chapter 13
ok, I have a HELOC that's been charged off, and the bank will no longer accept payments. I've even offered to pay the entire arrear balance of $8500 in one lump sum and continue with the regular payments but they will not accept due to the charge off status and would only accept payment in full $100,000
If i file chapter 13 and a plan is devised to repay the arrears, what happens after the ch 13 ends? is the loan reinstated? or can the bank then ask for the balance in full and foreclose if I do not pay off the entire charged off balance???
Re: Charged Off Mortgage and Chapter 13
You should be able to "cram down" the unsecured portion of your HELOC in Chapter 13. That means if you're upside-down on the second mortgage (e.g., your first mortgage is $200K, and your house is worth $240K, you would owe $60K more than your house is worth) you should be able to get the debt in excess of the value of the house discharged, (in the example, that $60K, and then you would only owe $40K on the HELOC).
If you're not upside-down, the debt remains secured.
Re: Charged Off Mortgage and Chapter 13
My house is worth about $320,000 and I only owe about $240,000 including both the first and second. I know the loan will still be secured and I have no problem making the monthly payments, however I'm not in a position to give the bank $120,000 in one lump sum.