I have a 1st mortgage and home equity line of credit. Can I include the line of credit in the bankruptcy filing and still keep the 1st mortgage and keep the house?
We just settled on our house last week and would like to do some repairs on the house. We don't have the cash, but would like to take out a home equity loan, but weren't sure if there was a "grace period" or something similar before you can do that.
Here's the story in a nutshell. I purchased a condo in 2005 on an ARM. Just out of a divorce, I decided to consolidate some debt with a home equity line of credit called a 125% loan. Bad move, since I didn't first refi the ARM. Now, the housing market has slumped, my property value is down, I have negative equity, and I can't refi. The ARM has gone up and is due to go up again in a couple months. My payment has doubled and I can't afford it. What will happen if I default on the 1st mortgae but remain current on the second? In other words, what happens to the second mortgage, and how might I be liable even if the payments are current on that loan?