QUESTION

What can we do if unbeknownst to me, the lien for our loan is still attached to our house and we want to sell it?

Asked on Jul 30th, 2016 on Bankruptcy - Oregon
More details to this question:
I filed chapter 7 two years ago. I called the lender on my HELOC to request a reaffirmation form so we could continue paying them. I was told they do not reaffirm HELOCS and it would have to go to bankruptcy.
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6 ANSWERS

Commercial & Bankruptcy Law Attorney serving Powell, OH at Ronald K. Nims
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It doesn't make any difference whether you reaffirmed on the loan if you want to sell the house. The loan needs to be paid off at the closing or you can't deliver a clean title.
Answered on Sep 01st, 2016 at 5:44 PM

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Bankruptcy Attorney serving Las Vegas, NV at A Fresh Start
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Second mortgages are not affected by a bankruptcy discharge. In escrow, this debt will be paid in full with all interest you owe as well as any late fees the contract provides. A reaffirmation is not required for you to continue paying a mortgage. Not getting the answer to this question 2 years ago has probably cost you a lot of money in late fees and your attorney did you no favors by not addressing this issue.
Answered on Aug 29th, 2016 at 6:25 PM

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Landlord & Tenant Attorney serving Thibodaux, LA at The Louque Law Firm, L.L.C.
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Two years is way too late to reaffirm a debt anyway. That has to be done before you get a discharge.
Answered on Aug 29th, 2016 at 6:24 PM

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A lien on property is not quite the same as a personal claim against you. The personal claim is discharged in the bankruptcy, but the mortgage lien (which is after all what a HELOC really is) is not automatically discharged. The lawyer who represented you in your Bankruptcy should be able to advise you on whether it is possible to reopen the BR case and somehow be rid of the lien or else get rid of the lien some other way. For example, if the balance owed on the first mortgage exceeds the value of the home, you could consider going to state court for a declaratory judgment that the HELOC lien has no value. This could well permit title insurance to be written. If you have not yet retained a lawyer well-versed in real estate, this is a good time to do so.
Answered on Aug 29th, 2016 at 6:23 PM

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If the lien is still attached, the general rule is that you must pay them off when you sell. If you have a mortgage that would absorb all the sales proceeds, however, making the HELOC unsecured in a practical sense, you can reopen your bankruptcy case and file a motion to strip the lien for the HELOC.
Answered on Aug 29th, 2016 at 6:22 PM

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Bankruptcy Attorney serving Las Vegas, NV
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You will either need to sell at a short sale or find a buyer for the entire sum owed against the house. You don't need to reaffirm to sell the house.
Answered on Aug 29th, 2016 at 6:22 PM

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