Trying to make a seller-financed deal, but she has $60k loan?

[Christie Duffy]

Hey all -

I am trying to make my first seller-financed deal for an off-market two-family home in Rutherford, NJ. The seller has no mortgage, but I just found out she has a $65k home equity loan and she is behind on making payments.

How would you handle this? I'm looking for creative ways to wrap it into the deal and/or to take over her loan. I'm firm on the down payment I've offered her, so I'm not interested in using that to account for the loan issue. I'm especially interested to hear from anyone with experience in New Jersey, in case any state-specific rules apply. Thank you!!