My Home Equity Lender is Still Trying to Collect After My Chapter 13 Bankruptcy – Joe


Dear Steve,

We filed for Chapter 13 bankruptcy September of 2009. The plan was confirmed on January 2010 and ultimately discharged January 2015. Included in the bankruptcy was a home equity line of credit that was deemed unsecured. The creditor has been reporting late 90 days plus every month right through to the current month (Aug 2016) and shows a status of “Unpaid balance reported as a loss by credit grantor”. I disputed the reporting and the result was that the item would remain (“remains”)

When does the 90 day late status stop getting reported? How long after an item is reported does it get purged.



Dear Joe,

Let me preface everything I am going to say with the absolute fact I am NOT an attorney. What follows is my general understanding of the issue. In situations like you I always try to direct the person back to their attorney to get specific answers to their situation. You paid your bankruptcy attorney for a service and these types of questions should be cheerfully answered by your attorney.

That all being said, there is so much that impacts the ability to eliminate a second mortgage through a chapter 13 bankruptcy. The most important factor is going to be if the home was worth less than the first mortgage. If so then the second mortgage/home equity account may be stripped and discharged. interestingly, it’s not that easy in a chapter 7 bankruptcy unless you live in Alabama, Florida, or Georgia.

If your home was worth more than the amount of the first mortgage then only part of the second mortgage or home equity lien would be eliminated, up to the value of the house.

If the value of your home was not more than the first mortgage, then when you received your chapter 13 bankruptcy discharge the amount due on the home equity line of credit (HELOC) should have been eliminated and the lien against your property, removed. Then then balance should be reported as $0 at the time of the discharge with no late payment from the discharge date forward.

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It’s entirely possible everything happened as expected in the chapter 13 bankruptcy and the HELOC is no longer owed. But it does not seem to be that uncommon that credit reporting data is not properly updated. Disputing that would be the route to take.

So, whew, all that being said, you raise excellent points that look like they need attention to repair them. However, I would absolutely encourage you to get clarification from your bankruptcy attorney that the HELOC was absolutely eliminated in the chapter 13 bankruptcy discharge and that any lien against your property has been removed. You can call the county recorder of deeds to check that.

Armed with that information you can then press the case and provide documentation to the credit bureaus that the debt was eliminated on X date.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

Damon Day - Pro Debt Coach

Steve Rhode

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