Most people who have arrears on their mortgage payments want to save their home and if you have equity in your home then you should consider a Chapter 13.
The bankruptcy discharge eliminates your personal liability for the mortgage, however it does not remove the lien that secures the mortgage. Even after filing bankruptcy, the mortgage lender still has rights in the property, including the right to foreclose if you don’t make your mortgage payments.
If you continue to make the payments, then most likely you will get to keep the house. The secured creditor would prefer you to keep the house and keep paying on the loan as there are a lot of costs in foreclosing and starting new with a new borrower.
If you are behind on your mortgage payments and it makes sense to keep your home, then consider filing a Chapter 13. However, if the debt on the house is equal to or greater than the value of the house, then you might want to consider an alternative. I wrote about last week. Sometimes, debtors have taken out home equity loans and the value in the property is over-encumbered to lenders. Or the value of the house is less than the economy around us.
Part of getting a fresh start may be looking at some of the alternatives I suggested in my ebook, when his or her home is a greater burden than the asset.