Hi,

Last year I lost a home I owned to foreclosure I had a first mortgage and then I took out a HELOC on top of that as a second lien. I recently got in the mail from a collection agency stating that they want to collect the 78K that I owe on the HELOC. My question is, I thought it was a securitized loan that is only secured by the home. If so they cannot come after me, or can they? Should I be worried about them garnishing bank accounts or wages? Or is it just an attempt to get whatever they can by hoping I'm just an ignorant guy?

Thanks in Advance, you guys do a heck of a job.

I will assume that it was the first mortgage that foreclosed on the home, and that the second lienholder chose not to make up the payments on the first, protecting their secondary position and then proceeding with their own foreclosure. The second can just sue you on the basis of the note, obtain a judgment and then use every means to collect their money. If in fact it was the second that did the foreclosure, the answer might be different depending on the instrument used to secure the note.

No it was the first who foreclosed, so they can garnish wages and levy bank accounts and all the other goodies involved?

Yes, I believe they can do all of those things to you. While I am not a great fan of Bankruptcy, which many people have abused in the past; there are situations where this vehicle might be the best solution. Obviously your foreclosure was caused by a decrease in your income or perhaps some other catastrophic event. I would suggest that you consult with a BK attorney, and see how the recent changes in the BK law affect you. While BK is an extreme step, it might shorten the time for you to rebuild your life. I wish you the best.

Thanks Doc