will it cause problems - short sale in chapter 13

[Houseofcards]

Something interesting just came up - seeking opinions on this.

We have signed our filing petition - waiting for the attorney to actually file our chapter 13.

We had 2 rental houses that we are surrendering.

One house has already forclosed and is currently REO and listed for sale with a sign in the yard.

The other has notice of default filed - not foreclosed.

Since we listed our intention to surrender the other house I assume that our business is done with the house - it will just be a foreclusure included in bankruptcy.

Now - what would happen if we list that house with a realtor to short sale it ?

Does this affect our chapter 13 any way ?

We would like to get it out of our name ASAP - and wouldn't mind helping the lender this way.

Any thoughts ?

thanks

[lrprn]

Now - what would happen if we list that house with a realtor to short sale it ? Does this affect our chapter 13 any way ?

There are two situations to consider - whether to short-sell before you file Ch 13 or after you file Ch 13.

To short-sell *before* you file Ch 13, you will have to get your lender to agree to the short sale and have the papers signed, sealed, and delivered before you can file. This is not a quick process.

To short-sell *after* you file Ch 13, the house wiil then be an asset of your bankruptcy and under the control of your trustee. You will need your trustee's permission to sell the home before you can even approach your lender. Getting permission from a Ch 13 trustee to sell bk assets during a bankruptcy is often not a quick process either.

We would like to get it out of our name ASAP - and wouldn't mind helping the lender this way.

If you are thinking that short-selling the house rather than having it foreclose will have less of an impact on your credit rating or willingness of lenders to work with you in the future, it won't. Don't make the decision about short-sell vs foreclosure based on this.

And frankly, although it's admirable you want to help your lender, they could really care less. Your lender is going to get their money back out of your house no matter what happens - short-sale or foreclosure.