Legal Question in Bankruptcy in California

Re: Predatory Lending

Take you heloc agreement to a bankruptcy attorney for review. He or she will should be able to guide you after reviewing the document.

Re: Predatory Lending

You've posted a number of issues, so I'll do my best to cover them all. First, with respect to the HELOC, you can always attempt to negotiate a modification of the loan. Depending upon the lender, you might do very well, or you may receive the cold shoulder. Receptiveness of your request is very lender-specific. As for the loan being made out of greed, and knowing that you may not be able to repay the loan, I'd be careful going down that path - you are probably as complicit in any potential loan fraud as the broker who helped you obtain the loan. That is not going to be the basis for a modification, the changed circumstances (i.e., failed business due to poor economy) is the basis. As for predetory lending, it has a lot more to do with the terms of the loan, than anything else. When Attorney Lemmons suggested having an attorney review your loan documents, that and a few other potential violations is what they are looking for. We generally look for (1) Predatory Lending Laws violations, (2) RESPA violations etc... These are issues that need to be analyzed by someone qualified to do so.

In a chapter 13, you MIGHT be able to eliminate the HELOC, but it has to be verifiably unsecured. In other words, the value of your house must be no more than the total of all liens before the HELOC, leaving zero available to secure the HELOC. Even then, its not an easy thing to do - removing the lien in a Chapter 13. Look at the site www . bankruptcylawnetwork . com for some articles on "lien stripping." There is also legislation pending in Congress to give judges the power to modify mortages in a bankruptcy proceeding, but it won't pass this year given the lame-duck Congress. It may come back next year, but you're probably not in a position to wait for that. Given that you are in Danville (or that area) you are out of my practice area, but if you consult with a local bankruptcy attorney, they can walk you through what it will take to get this done. My only caution is do not try one of the mortgage-modification companies you hear on the radio, see on TV and probably see billboards for - I have yet to come across one that can do half of what they claim. You really need an attorney to do this.

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