Legal Question in Bankruptcy in Virginia

Home Equity Loan Discharged - Do I Still Have To Pay?

My Ch7 was discharged in Oct 2007. Up until a few weeks ago, I'd been paying my monthly Home Equity Loan bills. Last month I checked my credit reports and found that my Home Equity Loan, along with the Mortgage, were listed with the bankruptcy.

I disputed and last week the results came in.

Mortgage= Status: Open/Never Late

Home Equity Loan= Status: Petition for Chapter 7 Bankruptcy/Paid,Closed. Monthly Payment=$0 Recent Balance=$0

I called to find out why it was still listed as such. It turns out that I hadn't signed a reaffirmation statement prior to the discharge and that the results would stay as is. I read the investigation results back to them and asked for help in the matter. They said, ''You'll need to contact your attorney. Good-bye''. I'm still waiting to hear back from my attorney (been almost a week). I don't want to continue making payments on a discharged loan if I don't have to, especially if it no longer benefits my credit report/score.

My questions:

1- Am I in the clear with the monthly payments?

2- Can the company do anything to me if I stop making payments? Will I lose my house?

3- Will I have to repay the loan when I sell the house?


Asked on 3/24/08, 9:58 pm

2 Answers from Attorneys
Susan Allen The Law Office of Susan E. Allen, PLLC

Re: Home Equity Loan Discharged - Do I Still Have To Pay?

A bankruptcy discharge on a secured loan relieves you of the personal obligation to pay the debt. It does not, however, remove the lien unless you undertake a lien avoidance action while in your bankruptcy. This means that the lender may foreclose on its lien.

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Answered on 3/25/08, 7:18 am
Daniel Press Chung & Press, P.C.

Re: Home Equity Loan Discharged - Do I Still Have To Pay?

Assuming the lender is properly perfected (filed deed of trust) against your property, the lender can foreclose if you fail to pay, or can wait and insist on payment when the house is sold.

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Answered on 3/25/08, 10:43 am


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