Modifying a HELOC - or Redocumenting?

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Question:

A HELOC borrower's debts were discharged under bankruptcy without a reaffirmation of our debt being filed. The borrower has agreed to repay our HELOC at a fixed rate and fixed payment. Do I modify the existing HELOC or redocument the loan?

Answer:

Was this loan included in the bankruptcy? The wording of your first sentence leads me to believe it was. If your stay was not lifted and your loan was discharged, you most likely have no debt to collect. You should consult your attorney before doing anything with this loan.

First published on BankersOnline.com 11/29/10