It largely depends on whether your mortgage payments are current or past due and how much equity you own in your home. Equity is the value of your home less the debt secured by the home – such as a mortgage. If your home is worth $100,000 and your mortgage balance is $80,000, the equity in your home is $20,000 ($100,000 value less $80,000 secured debt).
When you file bankruptcy, you are entitled to some exemptions. For a Georgia resident, one of these exemptions is the homestead exemption which allows someone to exempt $21,500 (or $43,000 for a couple filing jointly) equity in a home where you or a dependent reside. In the example above, the home owner with $20,000 in equity could keep a home in bankruptcy assuming the mortgage has no past due payments and the debtor can continue to pay the mortgage payments.
If there are past due mortgage payments, you can still keep your home if you can make an agreement with the mortgage holder for the payment of the past due amount or you file a Chapter 13 case and the court approves your plan for paying the past due amount. Another advantage of a Chapter 13 plan is you can still keep your home if the equity is more than the exemption amount as long as your plan provides for enough payments.
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