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Forcing an extension of the a Heloc in Chapter 13
The balloon payment is likely to draw an objection from the foreclosing
HELOC lender and/or the Chapter 13 trustee.
First, the trustee or secured creditor could object on the grounds that the
balloon payment makes the plan speculative or infeasible. (I tried a plan
like this and it was shot down on grounds of infeasibility, even though
there was a substantial equity cushion. Of course, a lot will depend on
your judge, trustee and secured creditor, so it is hard to predict.) The
trustee and/or secured creditor may insist that the debtor sell or
refinance *now*, instead of waiting until the end of the plan.
Second, apart from feasibility, a secured creditor can demand that the
debtor either surrender the property, or make payments in "equal monthly
amounts" per 1325(a)(5)(B).
Of course, just because something *might* not work, doesn't mean you
shouldn't try; but make sure client is aware that a creditor or trustee
objection could easily sink the plan. If debtor has enough time left
before the foreclosure sale, then he/she may be better off trying to get a
hard money loan to pay off the HELOC, rather than filing bankruptcy. Then
refi the hard money loan in 3-5 years when debtor's credit is in better
shape.
Best regards,
Clifford Bordeaux
Cohen & Bordeaux, LLP
3731 Wilshire Boulevard, Suite 600
Los Angeles, CA 90010
Certified Bankruptcy Specialist*
cliff@cohenbordeaux.com
www.cohenbordeaux.com
T (213) 267-1000
F (213) 805-6540
*By State Bar of California Board of Legal Specialization
On Sun, Nov 16, 2014 at 11:08 PM, Michael Avanesian michael@avanesianlaw.com
[cdcbaa] wrote:
>
>
> I am just starting to learn about Chapter 13's so I may be mistaken. In a
> Chapter 13, you can modify the HELOC to be paid over the 5 year period
> whether or not it has matured before the petition date.
>
> You should also be fine modifying the HELOC to be paid over 59 months +
> balloon on the 60th month considering there is 100k in equity "over and
> beyond" the value of the HELOC. Put in the Plan that Debtor will sell the
> home or refinance. Your arguments are much stronger because of the equity.
> You may have to fight for it, but I think the law/facts are on your side.
>
> Sincerely,
> Michael Avanesian
>
> On Sun, Nov 16, 2014 at 9:32 PM, stephen burton stephenburtonlaw@yahoo.com
> [cdcbaa] wrote:
>
>>
>>
>> Have a pc with a Heloc in foreclosure. Problem is the Heloc is all due
>> and payable next Spring. I seem to remember a case that allows me to
>> extend the payment of the Heloc balance, so long as it has not become due
>> and payable before the petition date, by paying the entire balance over
>> the life of the case. But that is not very practical with a Heloc balance
>> of about 180k. There is equity behind the Heloc too, about 100k, very
>> close to the homestead limit. Lender will not modify because they get paid
>> in full so why modify? Debtor cannot cut a break here.
>>
>> Anyone had any luck with a plan that pays the arrears on the Heloc over
>> the life of the plan and then pays off the Heloc on month 60 of the plan
>> either through a sale or refinance?
>>
>> Thank you in advance.
>>
>> Steve Burton
>>
>>
>
>
The balloon payment is likely to draw an objection from the foreclosing HELOC lender and/or the Chapter 13 trustee. First, the trustee or secured creditor could object on the grounds that the balloon payment makes the plan speculative or infeasible. (I tried a plan like this and it was shot down on grounds of infeasibility, even though there was a substantial equity cushion. Of course, a lot will depend on your judge, trustee and secured creditor, so it is hard to predict.) The trustee and/or secured creditor may insist that the debtor sell or refinance *now*, instead of waiting until the end of the plan. editor can demand that the debtor either surrender the property, or make payments in "equal monthly amounts" per 1325(a)(5)(B).Of course, just because something *might* not work, does
The post was migrated from Yahoo.
I am just starting to learn about Chapter 13's so I may be mistaken. In a
Chapter 13, you can modify the HELOC to be paid over the 5 year period
whether or not it has matured before the petition date.
You should also be fine modifying the HELOC to be paid over 59 months +
balloon on the 60th month considering there is 100k in equity "over and
beyond" the value of the HELOC. Put in the Plan that Debtor will sell the
home or refinance. Your arguments are much stronger because of the equity.
You may have to fight for it, but I think the law/facts are on your side.
Sincerely,
Michael Avanesian
On Sun, Nov 16, 2014 at 9:32 PM, stephen burton stephenburtonlaw@yahoo.com
[cdcbaa] wrote:
>
>
> Have a pc with a Heloc in foreclosure. Problem is the Heloc is all due
> and payable next Spring. I seem to remember a case that allows me to
> extend the payment of the Heloc balance, so long as it has not become due
> and payable before the petition date, by paying the entire balance over
> the life of the case. But that is not very practical with a Heloc balance
> of about 180k. There is equity behind the Heloc too, about 100k, very
> close to the homestead limit. Lender will not modify because they get paid
> in full so why modify? Debtor cannot cut a break here.
>
> Anyone had any luck with a plan that pays the arrears on the Heloc over
> the life of the plan and then pays off the Heloc on month 60 of the plan
> either through a sale or refinance?
>
> Thank you in advance.
>
> Steve Burton
>
>
>
I am just starting to learn about Chapter 13's so I may be mistaken. In a Chapter 13, you can modify the HELOC to be paid over the 5 year period whether or not it has matured before the petition date.You should also be fine modifying the HELOC to be paid over 59 months + balloon on the 60th month considering there is 100k in equity "over and beyond" the value of the HELOC. Put in the Plan that Debtor will sell the home or refinance. Your arguments are much stronger because of the equity. You may have to fight for it, but I think the law/facts are on your side.Sincerely, Michael Avanesian
On Sun, Nov 16, 2014 at 9:32 PM, stephen burton stephenburtonlaw@yahoo.com [cdcbaa] <cdcbaa@yahoogroups.com> wrote:
The post was migrated from Yahoo.
Have a pc with a Heloc in foreclosure. Problem is the Heloc is all due and payable next Spring. I seem to remember a case that allows me to extend the payment of the Heloc balance, so longas it has not become due and payable before the petition date, by paying the entire balance over the life of the case. But that is not very practical with a Heloc balance of about 180k. There is equity behind the Heloc too, about 100k, very close to the homestead limit. Lender will not modify because they get paid in full so why modify? Debtor cannot cut a break here.
Anyone had any luck with a plan that pays the arrears on the Heloc over the life of the plan and then pays off the Heloc on month 60 of the plan either through a sale or refinance?
Thank you in advance.
Steve Burton
The post was migrated from Yahoo.