IF I CHOOSE BANKRUPTCY, DOES THAT MEAN I SHOULDN’T CONSIDER A SHORT SALE?
While I believe this a question for someone’s attorney, I believe that the answer is very often going to be yes. I have lately been listing homes for clients that have come out of bankruptcy and decided to sell their homes through a short sale. The reasons vary but mainly they came to the conclusion with the advice of their attorney that they had little to loose and the a short sale will look better on their credit report long term than a foreclosure. It turns out that a foreclosure is more negative on a credit report than a bankruptcy. Furthermore, a short sale will look better than foreclosure as well.
Each state has different rules regarding deficiency judgement, but here in Nevada, the banks can file deficiency judgement on either a foreclosure or a short sale. They have more time on first trust deeds when you do a short sale but the time they have on seconds or HELOCs is the same with either a short sale or a foreclosure.
Ultimately each individual homeowner must evaluate their own circumstances to make the correct decision, but remember that just because you go through bankruptcy doesn’t mean that foreclosure is your best option. Please consult with your attorney and remember you can choose your own Realtor to do the sale and you should select someone with good experience at short sales and someone that has a good record of success with short sales.
I heard a statement from an attorney friend of mine recently and I thought it quite poignant: “Short Sales aren’t about homes or about mortgages, they are about life and moving forward”.
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