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CAN A BANKRUPTCY DEBTOR KEEP HIS HOME?

Bankruptcy is a process created by federal law that provides relief for debtors, who can either eliminate their debts or repay their debts. A Chapter 7 "liquidation" is the process by which debtors are rid of many of their debts. A Chapter 13 "reorganization" is the process by which an individual prepares a plan for repayment of creditors.


During a bankruptcy proceeding, a debtor can lose some of his or her property. This is more likely to occur during a Chapter 7 proceeding because the debtor seeks a "fresh start." A debtor's mortgage is often his or her largest debt, and a debtor facing bankruptcy may very well be "behind" on mortgage payments. A mortgage is a lien on a home or property. A Mortgage on a primary residence is not wiped out or "discharged" in bankruptcy. Not surprisingly, many debtors considering bankruptcy wonder if they will be able to keep their home. 

WILL FILING FOR BANKRUPTCY ACTION STOP A FORECLOSURE ACTION?