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  1. #1
    Join Date
    Apr 2006
    Location
    Over The Rainbow
    Posts
    1

    Default Defaulting on Home Equity Line After Chapter 7

    My in-laws filed Ch. 7 and it was discharged on/around 12/31/2005.

    They have a home equity loan worth with a balance of more then the value of the house. They've been unable to sell the house. The home equity line was part of the bankruptcy.

    After the bankruptcy was discharged - they stopped making payments on the home equity line. I don't believe that a reaffirmation agreement was signed.

    The bank is doing nothing - nothing that can be seen anyway - and property taxes are accruing and not being paid.

    Questions:

    1) How bad of a mess are they in?
    2) Can they transfer the deed of the house to the bank and walk away?
    3) Aside from the house itself - can the bank go after any additional assets?
    4) Are they liable for the difference between the ultimate value of the house and the balance of the mortgage?

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default

    They should discuss the status of the home equity loan with their bankruptcy attorney.

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