Yes, Chapter 7 bankruptcy will stop the foreclosure of your home in Georgia. However, it will only stop it for short period of time. Any person who is facing foreclosure that wants to keep their home should consider a Chapter 13 bankruptcy.
Chapter 7 is designed for people who are wiping out of their debts and getting a fresh start. In contrast, Chapter 13 is for people who have money to pay their creditors back but they just need more time. Many people refer to Chapter 13 as the “catch your breath” provision of the bankruptcy code.
There are some cases where a debtor has no objection to surrendering the house but they just need a few extra months to prepare for the move. Chapter 7 may get you those extra months in Georgia.
When you file a Chapter 7 or Chapter 13 bankruptcy, the foreclosure stops the day the case is filed. For this reason, it is an absolute must that you get a bankruptcy case number before the foreclosure date. The automatic stay stops the foreclosure.
As a general rule in Chapter 7 bankruptcy cases, a mortgage company will file a motion for relief from the automatic stay about four weeks after the case is filed. Approximately 30 days after the motion is filed, a hearing will be held in the bankruptcy court. In almost every chapter 7 bankruptcy case, the motion will be granted.
The only situations where the motion would not be granted are:
1. The debtor has become 100 percent current on all mortgage payments: or
2. There is so much equity in the house that the chapter 7 trustee wants the opportunity to market the property and see if she can recover money for the estate.
As a general rule, the mortgage company will restart the foreclosure proceedings in Georgia after the motion for relief is granted. My guess is that Chapter 7 will generally get a Georgia bankruptcy debtor an extra 3 months in their house.
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