If the company that holds my home equity loan says in disclaimer fashion that I may not be liable for my loan due to a bankruptcy, what does that mean?
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If the company that holds my home equity loan says in disclaimer fashion that I may not be liable for my loan due to a bankruptcy, what does that mean?
Asked on August 18, 2015 under Real Estate Law, Indiana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
Bankruptcy can release you from personal liability for the debt--i.e. for having to pay it--but does not typically eliminate the security interest in the home, which means that while you can escape personally paying by filing bankruptcy, they would still be able to foreclose and take the home although fiing for bankruptcy would temporarily stop them from doing so however, it does not permanently prevent this, which means that you may not be able to effectively sell the home if in default on the loan, since you could not transfer clean title.
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