Is the home equity loan a bad debt?

Has been bouncing around from 3rd party collectors for 2+years, but we have no money to pay. Struggling to make it pay day to pay day, robbing Peter to pay Paul. Have been offered 10cents on $ to settle. Sounds good but still don’t have $.

What does it mean when a loan is discharged?

Discharged loan debt does not automatically cancel lien. Discharged loans are a form of discharged debt. Simply defined, a discharged loan is when an outstanding debt has been forgiven. Nearly all loans can be discharged under the right circumstances, though the most commonly discharged are student loans and home loans, or mortgages.

What happens when a home equity loan is charged off?

If you’re in default on a home equity loan, at some point your lender may send you a notice stating that your loan has been charged off. This signals that the loan is no longer an asset on the bank’s books, but a liability.

Can a mortgage loan be discharged under Chapter 7 bankruptcy?

However, Chapter 7 bankruptcy does permit the discharge of loan debt though not the cancellation of lien. Therefore, if a mortgage debt is canceled under Chapter 7, the lending agency may have the right to seize the mortgaged property in exchange for the discharged debt.

Is the 125% home equity loan still available?

Find out if the 125-home equity loan is still available as many companies have put the program on hold. Many homeowners are in high demand of high LTV loans for refinancing and eliminating high interest loans and credit cards that carry adjustable rates and rising monthly payments.

When does home equity debt count as acquisition debt?

Home equity debt is debt incurred where the proceeds were not used for these purposes. All of your debt will be acquisition debt if your only loans were the original mortgages used to buy the property. Only the outstanding balance on the original acquisition debt mortgages will count for refinanced loans.

Can you get a home equity loan while in bankruptcy?

Unfortunately, you would not be able to get a home equity loan while in Chapter 7 bankruptcy for a number of reasons. Your assets are largely controlled by the bankruptcy court. When you borrowed money to buy your home, you signed a note (which is the loan) and a mortgage (which is the lien).

Can a home equity line of credit count as mortgage debt?

Only the outstanding balance on the original acquisition debt mortgages will count for refinanced loans. Part of your debt will be home equity debt if you did a debt consolidation refinance or took cash out, or if you had a home equity line of credit used for purposes other than to acquire a house. This debt will not qualify under the relief act.