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Can You Discharge a Home Equity Line in a Chapter 7 Bankruptcy in Missouri or Illinois?

A Missouri or Illinois Chapter 7 bankruptcy offers a lot of help for the right kind of financial situation. It can be a solution to credit card debt, stop harassing creditor calls and wage garnishments, and even halt a foreclosure or repossession. But, what if your home equity line is giving you trouble?

Typically, a home equity line is secured by your real estate, meaning there is a lien on your house and if you don’t pay the debt, they can take the house and sell it to pay off the loan. In a Chapter 7 bankruptcy, almost any debt can be discharged unless it is tied to property that you wish to retain. So, just as with a mortgage or a car loan, you cannot discharge a home equity line in a Chapter 7 bankruptcy if you intend to keep it.

But, before you start to whisper “Oh No!”, know that you’ve got options. A Missouri or Illinois Chapter 13 bankruptcy can put your back payments into your Chapter 13 payment plan and allow you to continue with your payments outside of the plan. In some instances, if you owe more than your home is worth on your first mortgage, you may be able to strip the loan and discharge the debt completely. Of course, you will need an experienced and qualified St. Louis, Missouri or Fairview Heights, Illinois bankruptcy attorney to help you decide if that is an option for you and help you through that maneuver.

The ability to understand each of these specific instances and how Missouri or Illinois bankruptcy can help is a great indicator of the caliber of your bankruptcy attorney. You will always want to make sure that you find an attorney who knows every option in every situation. When it comes to bankruptcy, something that wouldn’t fly in a Chapter 7 may fly in a Chapter 13 bankruptcy—or vice versa. But only a bankruptcy lawyer in Missouri or Illinois who has had enough experience can help you find the perfect solution.

So, how will you know that a bankruptcy attorney has had enough experience to handle your case? Most bankruptcy lawyers in Missouri and Illinois offer free consultations but, the best show you how much they know by offering free articles, bankruptcy faq, and even publications. You can learn more about the best qualities to look for in a St. Louis Missouri or Fairview Heights Illinois bankruptcy attorney by requesting a free copy of my ultimate Missouri and Illinois bankruptcy book, “Get Out of Debt: Secrets Your Creditors Don’t Want You to Know.”

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