Posted: Tue Jun 16, 2009 6:40 pm Post subject: What happens with our HELOC after short sale
I live in California with my wife. In 2005 she became ill and could not work, so by the summer of 2007 we defaulted on our house. The bank agreed on short sale and the house was sold January 2008. When we bought the property the bank set up the finance with two loans, the mortgage loan (80%) and a line of credit (10%). The last 10% we put down. The property was sold for $215 000 less that we paid for it. We received a 1099-C this year for the mortgage loan but nothing for line of credit.
My question is now: There is a company that bought the HELOC debt from the bank who is calling me and they want me to pay the loan back. We don’t have the finance now ($65 000), and I don’t know if we ever will. So what can I do? _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
Looks like that loan has been sold to a collection agency. Your best option is to negotiate with the collection agency and pay off lower amount them you owe. Most of the time you will be able to negotiate the amoutn to 50% of what you owe, but it will be difficult process.
They can probably sue you if you do nto make payment
The debt collection agency will come after you for the balance of the HELOC loan. You can negotiate with the collection agency and settle for an amount less than the actual balance on the loan. You can also work out a repayment plan with them and pay off the amount through regular payments. You should get the negotiated amount in writing before you send them any money to pay off the debt. Also discuss with them how they are going to report it to the credit bureaus, once the debt is paid off.
negotiate with the collection agency. but get every thing in written
Klas Guest
Posted: Mon Jun 22, 2009 6:02 pm Post subject:
Thank you for your answers! I am not in a position to pay it back so I don't know when we will be abel to do anything about it. I guess I was hoping for a magical way to get out of this debt... _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
Posted: Mon Jun 22, 2009 7:36 pm Post subject: Collection agency reporting to credit bureau
Hi Klas,
Just a comment about the advice Jenkin7 gave: Strongly agree with Jenk to get in writing about how they will report the debt to credit bureaus. Would not be good if they report it as a bad debt charge off after you've paid them according to terms they've agreed to.
bail me out too Guest
Posted: Tue Aug 04, 2009 7:00 pm Post subject: short sale and collections
this is not right! people in trouble get short sale approval then get a 1099 then the bank turns over balance to a collection agency all the while Obma has given banks endless amounts of money to off set the differences and pmi should cover! this is all a scam on the consumer from the banks again!
Posted: Mon Nov 02, 2009 3:48 pm Post subject: Im in the same exact position as Klas..
But my Heloc has not gone to collections yet. I owe 96k. They said they would accept 30k then Write a 1099C for the remainder. Is this a good idea? Or should I let it go to collections and try to negotiate with them?
help?
Me Too!?!?! Guest
Posted: Mon Nov 02, 2009 3:51 pm Post subject:
One more thing!! KLAS, I have been told that they can't issue a 1009-c AND send to collections. That is redudant. The 1099c means they have written off the remaining balance and issued it to the IRS as income to you. Collections, is not the same thing! Collections is where they sell it to a 3rd party and you are now at the mercy of the 3rd Party. Check on that!
If your loan is charged off, then it would have a negative effect on your credit report. If your lender is offering a settlement, then you should go for it. _________________ Procrastination is the enemy of your financial sucess
Realgeni
