Mar 30, · However, this is not to say that Chapter 7 is not worth filing when facing foreclosure. Individuals who are current with their first mortgages and want to keep their homes can use Chapter 7 to cancel other debts. This will free up money to apply to the first mortgage. If the mortgage balance exceeds the value of the home, Chapter 7 bankruptcy. As soon as you file for Chapter 7 bankruptcy, you lose control over your assets. The court, acting through a bankruptcy trustee, decides whether you can keep your home or whether it is better sold. In Colorado, whether you keep your home after filing a chapter 7 bankruptcy depends on three factors – do you want to keep it, are you current on the payments, and do you have any equity?. First, you need to decide whether you want to keep the house. If you owe far more on it than it’s worth, your interest rates are too high, or if it needs more work than you can afford to put into it, you.