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What is the statute of limitations of a heloc in az? It was purchase money and the house is already foreclosed on.

Gilbert, AZ |

The loan was an 80/20 through chase. The Heloc is for $22,000. They are offering to settle but we don't have any money to pay them. If we don't settle, Can they still sue us?

Attorney Answers 3


My initial question is, if the loan was 80/20, was your HELOC used to purchase the property?

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Yes the heloc was used to purchase the house.

Robert H Nagle

Robert H Nagle


Then, assuming your house qualified for anti-deficiency protection, the fact that the document was called a HELOC doesn't change the reality that it was a purchase money loan. As such, the lender may not obtain any further money from you for the unpaid balance.


Yes, the critical question is really the nature of that 80/20 loan ... was it a purchase money second or was it cash taken out after the purchase of the home? Was it refinanced, etc.

If this really is a purchase money loan, there is a strong likelihood that they cannot collect anything from you at all. I have dealt with several lenders where one "kindly" worded letter was all it took to help them realize that they could not pursue the homeowner. I strongly suggest speaking with an attorney and determining whether or not you really owe anything. It would be sad to see you agree to pay a few thousand dollars if you owe nothing.

This firm is in the business of helping people and companies file for bankruptcy protection. Therefore, the bankruptcy code requires that we call our firm a "debt relief agency." This information is provided for general information purposes only and is not intended to be a legal opinion, legal advice or a complete discussion of the related legal issues. This advice is not intended to create a client - attorney relationship. Every individual's situation is different and you should seek independent legal advice from an attorney familiar with the laws of your state or locality regarding specific information.

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I have had this situation come up before. The case law says, it does not matter what the bank calls the loan - it is essence of the loan that matters.

If the essence of the loan is purchase money - meaning money that purchased the house and land (not improved) - then you will be protected.

I have never have it go any further than an exchange of letters.

Good luck.

Jim Webster

1845 S. Dobson Rd. Ste 201
Mesa, AZ 85202

(480) 464-4667

We are a debt relief agency. We help people file for relief under the Bankruptcy Code.

Please contact me directly with document for a free 30 minute consultation to get more concrete advice. This is not legal advice. I don't have enough information to give actual legal advice. I can only take the limited information presented and provide a framework to know how your situation may turn out. I may have questions that bring up issues you did not think were important but make a big difference.

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