Quincy, FL Bankruptcy Law Firms & Lawyers

You cannot discharge a HELOC through ch. 7. The only way to do it is through ch. 13, where you need make some payments to unsecured creditors through an approved plan. You will need to sit down with a bankruptcy attorney to discuss details of what a ch 13 bankruptcy entails and to evaluate your circumstances to see if that is the best course of action for you.

You have many good questions and the answers are complicated. First, all debts must be listed in a bankruptcy case. There is no such thing as not including a debt, mortgage or property in a case. Once you get a discharge of your debts, including the note for the mortgage, you do not owe them any money and payments cannot be listed on the credit report because you don't owe them any money. All the bank has now is a claim against the property that was pledged as security they cannot look to the maker(s) of the promissory note for payment nor include information about a discharged debt on a credit report. In the Southern District of Florida you would be allowed to reinstate the mortgage, assuming you could make the appropriate payments, in a Chapter 13 case. This is true even if you just finished a chapter 7 case, you just might not be entitled to a discharge of any debt. In addition, there is a Mortgage Modification program which is now beginning in our courts which might help a number of people get modifications where really needed. The way you stand right now is that the lender can only look to the property to be paid and can never look to you or your husband(assuming the debt was discharged and not reaffirmed). So if you both passed, there would be no liability by either of your estates, but the lender could sell the property to satisfy the lien/mortgage it holds on the property.

I would. Even if the debt is passed the statute of limitations, Creditors sometimes sue on debts that are past the statute and listing them on your Bankruptcy Petition would prevent that from happening.