A short sale is a real estate negotiation between the home owner and the mortgage bank. Your real estate agent should be one that has had some experience with short sale negotiation with a mortgage bank. With the proper guidance from a short sale specialist real estate agent, you may be able to sell a property for lower than the amount owed on the mortgage and any other liens on the property. Many people who are struggling with debt issues are also dealing with a mortgage that is too high to pay and may need an option to sell the home, but with multiple loans on the home, the sale price may not cover the full mortgage amount that is due. When you are in this situation, a short sale negotiation is almost inevitable. You can check with your local real estate agents to see if a short sale may be an option for you. If you are already in the process of a short sale, you can use a bankruptcy to limit an impact of left-over debt from a short sale.
A bankruptcy can work in conjunction with a short sale to create a well rounded plan that will leave you in a better situation to recover quickly from the short sale and get financially prepared to be able to own another home within a few years. There are many ways that a bankurptcy can help. If you consult with a bankruptcy attorney while you are in a short sale negotiation, the bankruptcy may be able to push foreclosure deadlines out to a later date to give the bank enough time to process a sale. In some situation, a foreclosure date is schedule on a property that is going through the short sale process, but a scheduled foreclosure date looming and does not allow enough time for escrow to close. In this situation, bankruptcy protection can actually slow the foreclosure process while discharging outstanding debts at the same time.
HOA debt is another issue that can be relieved in a bankruptcy. HOA debt after a foreclosure or a short sale is still outstanding and will now follow you as unsecured debt. A bankruptcy can get rid of the HOA debt as unsecured debt. Since you no longer own the home, there is no asset that the HOA past due amount is attached to. A Chapter 7 bankruptcy will wipe out this debt so that a creditor can no longer collect on it and the debt is no longer a liability.
If you are going through a foreclosure or short sale process, it is always a smart move to check with your bankruptcy attorney in order to include a bankruptcy into the plans and make sure you are utilizing all of your rights and protecting yourself from the impact of a short sale or foreclosure.
Bankruptcy Law Professionals is a bankruptcy law firm based in Orange County and Inland Empire. We have clients from Victorville all the way to the coast. To schedule an appointment to meet with a bankruptcy attorney, contact us at 855 257-7671.