If you've decided to file for Chapter 13 bankruptcy, you're probably wondering what might happen to various types of debts, including home equity loans. Chapter 13 bankruptcy provides a number of protections for filers, and needed financial relief for many Americans.
Understanding how the bankruptcy court might treat your various debts is an essential part of making the decision of whether or not to file for bankruptcy. Here's a breakdown of the factors that contribute to how a home equity loan is handled in Chapter 13 bankruptcy.
If you have a home equity loan and your mortgage is currently "underwater" (meaning you owe more on your first mortgage than the house's value), you might be a good candidate to have your home equity loan discharged in a Chapter 13 bankruptcy filing.
A local attorney can help you explore this option.
If you're ready to learn more about your specific financial situation, you can take advantage of this opportunity to connect with a bankruptcy lawyer practicing near you.