Last updated September 18, 2026
Short answer
Many people keep their home. That depends on mortgage payments, equity versus the homestead exemption, and whether Chapter 13 is needed to catch up arrears. A discharge of credit-card debt does not erase the mortgage lien.
Two different systems apply: exemption law (mostly state in Alabama and Georgia) and mortgage law plus the stay. Equity that fits the homestead may be protected from the trustee. The lender still has a lien. If you are behind, Chapter 13 is the usual tool to cure default. If you are current and equity is exempt, Chapter 7 is sometimes enough—until the lender seeks stay relief for missed payments.
When Chapter 7 can work
If you are current (or can become current) and the trustee has no non-exempt equity to administer, Chapter 7 may discharge unsecured debt while you keep the house—if the lender is satisfied and exemptions were claimed correctly. That is a facts-and-statute question, not a slogan.
When Chapter 13 is the better fit
Arrears, a pending foreclosure, or non-exempt equity often point to Chapter 13. § 1322(b)(5) allows curing a default on a home mortgage over a reasonable time while maintaining ongoing payments.
Property
Claim the correct state homestead. Recorded judgment liens may impair that exemption and sometimes can be avoided.
Chapter 7
Can delay a sale and discharge unsecured debt. Does not create a multi-year cure plan. Lenders may move for stay relief if payments lapse.
Chapter 13
Primary tool to catch up a home loan and manage other debts at the same time, if the plan is feasible.
How Brock & Stout can help
We review the mortgage, sale date if any, tax and HOA status, and likely exemption. We explain Chapter 7 versus Chapter 13 and file if you proceed. We cannot guarantee you will keep the home.
Frequently asked questions
Personal liability on a discharged mortgage can be barred. The lender keeps in rem rights against the property. Deficiency rules depend on state law and whether the debt was discharged.
Related resources
- Alabama Homestead Exemption — Alabama Homestead Exemption
Alabama protects a qualifying homestead up to the limits in § 6-10-2 and related sections. A mortgage still has to be paid or cured. A judgment lien that impairs the homestead may be avoidable under federal § 522(f). Rural vs. city acreage rules are in the statute—read it.
- Bankruptcy and Foreclosure — Bankruptcy and Foreclosure
A bankruptcy filing generally stays a foreclosure, including many sales that have been scheduled but not yet completed. Chapter 13 is the chapter most often used to catch up mortgage arrears over time. Chapter 7 may delay a sale but does not by itself create a plan to cure the default. Timing is critical.
- Can Bankruptcy Stop Foreclosure? — Can Bankruptcy Stop Foreclosure?
If the foreclosure sale has not been completed, filing usually triggers the automatic stay and stops the sale. If the sale already occurred, bankruptcy rarely unwinds it. Catching up the loan generally requires Chapter 13 or another loss-mitigation path—not Chapter 7 alone.
- Can I Keep My Car If I File Bankruptcy? — Can I Keep My Car If I File Bankruptcy?
Keeping a car usually requires two things: exemption protection for your equity, and a strategy for the lender. Chapter 7 options include stay-and-pay, reaffirmation, redemption, or surrender. Chapter 13 can catch up a car loan and, in some cases, reduce the secured claim.
- Georgia Homestead Exemption — Georgia Homestead Exemption
Georgia protects a qualifying residence up to the homestead amount in § 44-13-100(a)(1). It is a dollar cap. A large amount of equity, or a pending foreclosure, can still force Chapter 13 or a sale analysis. This is not Alabama’s homestead statute.
Facing an urgent debt problem?
Talk with a bankruptcy attorney about garnishment, foreclosure, repossession, or a lawsuit. A consultation can explain options. It does not guarantee a particular result.
This page is general educational information about bankruptcy as of the date shown. It is not legal advice, does not create an attorney-client relationship, and does not guarantee results. Outcomes depend on individual facts and current federal and state law. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
