If you are unable to pay your mortgage and are in danger of losing your home, you might want to consider a short sale. A short sale is where, with the knowledge of the lender, you sell your home for less than what you owe on the loan. In most cases, the proceeds of the sale eliminate the remaining obligation to your mortgage company.
Less Damaging Than Foreclosure
A short sale can be an alternative to foreclosure and is typically less damaging to your credit report. In a short sale, the remaining balance after the home is sold can remain a debt for you to pay. In many states, the lender will waive the deficiency, and you will be relieved of any further obligation for the home. Other factors involved when considering a short sale is that the tax requirement could be considerable.
There are several parties involved in a short sale. Getting everyone to agree during negotiations can be difficult and time-consuming. Filing bankruptcy will give you an automatic stay, and you will get immediate relief from foreclosure or short sale procedures.
Why do a Short Sale?
If the debtor has surrendered the property for a Chapter 7 bankruptcy case and there is no equity in the home, and it is unable to sell. The debtor may still be responsible for debts incurred for the property such as maintenance assessments while the title is still in his name. Once he is out of bankruptcy, a lawsuit may be filed to collect the debt from the home. A successful short sale will eliminate any potential liability.
If you are in danger of losing your home and are considering a short sale to relieve yourself of the mortgage obligation, talk to a Cincinnati bankruptcy attorney to discuss how filing bankruptcy can get you immediate relief from enforcement activities. Bankruptcy allows you to decide if you would like to forfeit your house and wipe that slate clean or make a plan to catch up on payments. It is in your best interest to find out all of the choices you may have in regards to your mortgage.