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  1. #1
    Join Date
    Sep 2009
    Posts
    1

    Question Effect of Charge-Off of HELOC on Lender's Ability to Obtain Deficiency Judgment

    My question involves a foreclosure in the State of CA. The situation I am dealing with is if a lender in 2nd lien position with a HELOC charges off a HELOC prior to a foreclosure initiated by the 1st lienholder, does the charge-off affect the 2nd lienholder's ability to obtain a deficiency judgment?

    I believe I already know the answer to this - that the charge-off is only an accounting/taxation issue for the lienholder and it has no impact on the lienholder's ability to enforce/collect the debt nor its ability to obtain the deficiency judgment.

    The question I cannot find any answer to is can anyone point me in the direction of a statute or case law that supports that a charge-off does not preclude a lender's ability to collect on the debt??

    Thank you in advance for any help!

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Effect of Charge-Off of HELOC on Lender's Ability to Obtain Deficiency Judgment

    A charge-off is an accounting entry. It does not have any relevance to whether a debt may still be collected or whether a creditor may sue you. If you want to look for case law, try a site like LexisOne.

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