The financial crisis started in 2006 resulting in an upsurp of bankruptcies, these bankruptcies are slowly being removed from credit files as they disappear from credit reports after 7 years.

Even if Citi didn't write the first HELOC, if they purchased it or became an owner through bankruptcy of another lender, etc, their name would appear on the instrument since they are the new owners.

The dental practice claimed bankruptcy, and pulled all the chairs and equipment out.

Had we leveraged the house, we would have likely had to declare bankruptcy or do a short sale - which would have had killed my ability to invest as I rebuild my net worth.

People make the mistake of believing all debt can be wiped out through a bankruptcy and this is not true.I know you didn't mention this I am just throwing it out there for other people.I would get rid of and pay off your high interest rate loans.This will shift away the bad debt and free up more funds for the good debt that is working on producing income instead of taking it away.Not a fan of paying extra to the mortgage.You would just be trapping equity that would not be growing at the pace of inflation thereby diminishing the value of the equity.Instead if you put that money to work buying properties in one of the best buying cycles ever in real estate you can work to create long term wealth.You don't want to over leverage but you also do not want money sitting on the side lines.Where people mess up is to not buy correctly and over leverage themselves in a bad way.I am very conservative.I do not want to hold something that was supposed to be a flip,wholesale whatever because it was a mistake and now I am stuck with it for awhile.I would rather keep throwing out what will seem like to any seller (bank included) a low offer.Then over time build up a QUALITY portfolio and not a QUANTITY one.You can get quality and quantity if you are patient and make good decisions.The problem is many hit a home run and then go overboard and get strike outs.A few bad properties can almost sink the good ones or at best make you break even when you should be cash flowing like a monster.Watch equity firms that raise capital.They know what they want,how much they will pay,and they do not deviate from it.Over time they build a quality portfolio that can weather many storms that happen in the real estate cycle.If you buy incorrectly and the margin for cash (if everything goes right) is small you are asking for a disaster when the market takes a turn.I see mistakes daily as a commercial listing broker and an investor from other people.I always try to learn how they made a mistake and what happened.I only have one property a 20 unit currently.I am looking for more but only under the right conditions.I have looked at property for years.

@Julian Buick@David FaulknerReasons an individual  note holder might sell a $20,000 UPB for $12,000 right now:Death, illness/medical bills, qualifying for government benefits, nursing home costs, bankruptcy, divorce, law suits, business needs, their grandchild gets arrested for drugs and needs an attorney, they may have 90 days to move granny into their home and must remodel accommodations, they may be tired of collections and the tax headaches and servicing.

I've been told the female's credit is excellent (750+), but the male has a a short sale within the past 7 years and a bankruptcy 10 years ago.  

The requierement is that the buyer has to have great credit, nothing bad in the credit at all: no foreclosures, short sales or bankruptcy in the past.

Usually taxes and credit will not disqualify a borrower unless there are multiple bankruptcy, foreclosures, or fraud/criminal activity. 

If you are doing the subject 2 to rent out and the seller files a bankruptcy, then you need to deal with the renters and find them a place for them these are just things that you could be faced with I hope not.Joe Gore