Again, the answer is “it all depends”.
Bankruptcy can stall the foreclosure process, but only until state laws allow the mortgage holder can proceed again with foreclosure. For example, in Georgia, unless you follow very strict rules and guidelines, it only delays the inevitable foreclosure process for about a month or less.
Most people file for Chapter 7 bankruptcy (complete forgiveness) and want all their debts forgiven including household, but normally when these situations exist, the homeowner doesn’t have the continuing income to make the monthly payments and therefore must then relinquish their home as well.
However, if the homeowner is in a position of Chapter 13 (debt restructuring) and has income but needs a break on debt repayment, then the home may be kept and the mortgage balance may be restructured thereby preventing a foreclosure.
Always consult with an attorney who is experienced with bankruptcy laws in your state. Visit the Georgia Bar Association (404-527-8700) website for possible sources.
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