If you own a home and are considering filing for bankruptcy you are likely concerned about what will happen to your home. It is important that you understand your options when it comes to your home and bankruptcy.

A few quick facts to know:

  • Filing for bankruptcy will stop (at least temporarily) a pending foreclosure.
  • There are more options and protections for homes under Chapter 13 bankruptcy versus Chapter 7 bankruptcy.

Keeping Your Home

Bankruptcy law provides for you to keep the property, assets, and other belongings valued up to a certain dollar amount through exemptions. The Georgia homestead exemption allows you to protect up to $21,500 of equity in real estate. If the title to the property is held by one of two spouses, you may exempt up to $43,000 of equity in real estate.

Home equity is determined by subtracting the amount owed on the house from the current fair market value of the property. As long as you do not have too much equity in your home, you will be able to protect its equity through bankruptcy.

Mortgage Payments After Bankruptcy

If you plan to keep your home that has a mortgage, you must continue to make your monthly house payments during and after bankruptcy. Home loans are secured debt, meaning the loan is attached to the home as collateral. If you do not make your payment, the mortgage company will have the right to foreclose on your home.

Further, if you want to ensure your home will not be taken by the mortgage company after bankruptcy, the U.S. Bankruptcy Code requires you to “Reaffirm” your mortgage during the bankruptcy. This means you need to sign paperwork that reaffirms the terms of your mortgage. There are other implications of reaffirmation agreements as well, which we will go over during our free consultation.

Chapter 13 Protections for Homeowners

While filing for either Chapter 13 or 7 will immediately stop a pending foreclosure sale, Chapter 13 offers benefits to homeowners that Chapter 7 does not.

Make up Missed Mortgage Payments

Chapter 13 bankruptcy creates a three to five-year repayment plan. Homeowners have the opportunity to include missed mortgage payments in their Chapter 13 repayment plan. Thereby creating an opportunity for homeowners to catch up on mortgage arrears. For more information, read our article Catch Up on Missed Mortgage Payments with Chapter 13 Bankruptcy.

Eliminate an Underwater Second Mortgage

Chapter 13 creates an opportunity to eliminate a second mortgage on an underwater home. This is called a lien strip, and it is only available when the first mortgage is underwater and the debtor completes all plan payments. A lien strip can save a debtor tens of thousands of dollars, or more. Learn about how a lien strip operates in our article Underwater Homes Eligible For Second Mortgage Lien Strip in Chapter 13 Bankruptcy.

Chapter 13 bankruptcy is a powerful tool that can help homeowners save their homes.

We help hundreds of homeowners just like you keep their homes through bankruptcy each year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case.

Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.


We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code. Find out more about Bankruptcy in our guide: All About Bankruptcy.

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