TO GET A FRESH START   Chapter 7 allows you to walk away from a mortgage you cannot afford.    Chapter 7 will also stop a foreclosure and give you time to find a new place to live.

Chapter 7 is a liquidation type of bankruptcy rather than a reorganization.  There is no payment plan and there is no payment plan to catch up and repay missed mortgage payments.   In other words, if you are behind on your mortgage and you file Chapter 7, you will most likely need to surrender your home.

When you file a Chapter 7 debt liquidation, you can stop a pending foreclosure, most likely for a few weeks to a few months.  After you file, the mortgage company will file a motion in bankruptcy court called a “motion for relief from stay.”   In this motion, the lender will ask the judge to lift bankruptcy protection as to your mortgage so it can restart the foreclosure process.

The motion for relief process will likely take about 3 to 4 weeks to complete.  Then the lender has to start the Georgia foreclosure process all over.  This means that in most cases, you will have between 4 to 8 weeks to prepare to move and to find a new place to live.   Chapter 7, therefore, will not solve your current mortgage delinquency but it will give you breathing room and a chance to move on your terms.