GMAC settle on HELOC

[amyinflorida]

I used a HELOC to purchase a buisness in 2007($44K) and I am closing the buisness because it is not paying for it's self anymore.
The buisness was always paying the HELOC payment and now that will not be happining.
I am going to try to get GMAC to settle for 10% of the balance. Has anyone had luck with this situation? We purchased our home in 2005 and are about $115K upside down. Our 1st mortgage is serviced by GMAC also. And we are current and have never been late on any of it.
August will be the start of not paying the payment. I have counsled with and Atty. regarding a chapter 13 bk. However, he told me that most fail because you are only allowed approx. $100 a month extra spending money for 5 years. They also apply any tax refund that you get to the bk and if you were to get a raise or bonus etc.
If any is in the process or have succesfully received a principal reduction on a heloc/2nd I would like to hear your story.
Thanks!

[Evan Bedard]

Hi amyinflorida welcome and thank you for joining our community.

If any is in the process or have succesfully received a principal reduction on a heloc/2nd I would like to hear your story.

I have not seen anyone achieve a principle reduction on either their 1st or 2nd lien. But I have seen quite a few settlements of 2nd mortgages anywhere from 10-20% of the remaining balance..

[amyinflorida]

Hello, Evan.
Thanks for the reply. I guess I did not use my terminology properly. I was was thinking a principal reduction and settlement are the same thing. So I do have a fighting chance, huh? That makes me feel a little more positive about the whole thing.
If any one else on this forum has reached a settlement and would like to share it with me I would be grateful. I would like to know what kind of time frame until the banks start to negotiate.
Thanks!