Legal Question in Real Estate Law in Nevada

If you lose your home in a foreclosure, you still owe the loan on the HELOC even though the property has been sold.

The lender can either sue you to collect or "forgive the debt." If the debt is forgiven, there are usually tax consequences which can be substantial.

As an attorney who represents people in bankruptcy, having this kind of situation occur is a major reason why many people chose to file bankruptcy. The burden of paying the HELOC or even paying the taxes for the HELOC is so overwhelming, that bankruptcy may be a better option than paying this enormous debt. It is important to obtain specific legal advice sooner rather than later.