I Am Currently 4 Months Behind on My Mortgage and HELOC. What Do You Suggest? – Debbie

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“Dear Steve,

I am currently 4 months behind on my mortgage and my heloc. I have worked out a modification with my primary lender that I can live with, and I continue to work out a settlement offer with my heloc throuogh chase bank. what would happen if I just paid my first mortgage ? could the heloc bank attach to the home?

Do You Have a Question You'd Like Help With? Contact Debt Coach Damon Day. Click here to reach Damon.

Debbie”

Dear Debbie,

I can’t think of any reason why the home equity line of credit lender could not sue you for default and place a lien against the home, unless….

You really might want to consider a Chapter 13 bankruptcy. In the bankruptcy you’d keep your house, make the new modified mortgage payment and if your home was worth less than the total owed with the HELOC, the HELOC might be able to be reduced to fit in the value of your home and more importantly, your income.

I strongly urge you to call a few local bankruptcy attorneys and find one that you feel comfortable with so you can go in and meet with them face-to-face to discuss your situation. Most bankruptcy attorneys offer a free bankruptcy consultation appointment.

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

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Steve Rhode Debt Coach and Author
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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3 thoughts on “I Am Currently 4 Months Behind on My Mortgage and HELOC. What Do You Suggest? – Debbie”

  1. How to convert HELOC to fixed rate mortgage and pay not tax penalty when house is sold?
    Hi,
    To buy new house I took HELOC against my old house which I planned to sell shortly to pay off HELOC. I could not sell my old house so I am using it as rental property now. I want to convert HELOC into fixed rate secondary mortgage. If I convert HELOC into fixed rate mortgage, when I sell my rental property will the money from sale be transferred to my primary mortgage company without lump sum distribution to avoid tax penalty?

    Thank you

    Reply

  2. How to convert HELOC to fixed rate mortgage and pay not tax penalty when house is sold?
    Hi,
    To buy new house I took HELOC against my old house which I planned to sell shortly to pay off HELOC. I could not sell my old house so I am using it as rental property now. I want to convert HELOC into fixed rate secondary mortgage. If I convert HELOC into fixed rate mortgage, when I sell my rental property will the money from sale be transferred to my primary mortgage company without lump sum distribution to avoid tax penalty?

    Thank you

    Reply

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    Reply

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