Can you do a short sale while in chapter 13?

[ELBKnow]

Just curious.

[HHM]

Yes, but you will need to get permission from the trustee.

However, why bother to do the short sale. If you no longer want the home or cannot afford it, just let to go to foreclosure. You are already in a BK, so it won't matter.

[Mi Bankruptcy]

Yes, but you will need to get permission from the trustee.

However, why bother to do the short sale. If you no longer want the home or cannot afford it, just let to go to foreclosure. You are already in a BK, so it won't matter.

Doesn't that make it worse for her after filing bankruptcy and then having a foreclosure if it's not necessary? Wouldn't it still look good if she could sell it? Just curious?

[HHM]

Doesn't that make it worse for her after filing bankruptcy and then having a foreclosure if it's not necessary? Wouldn't it still look good if she could sell it? Just curious?

Not if it is "short sold", short sold is just as bad a hit on your credit.

[SMinGA]

Want to pick your brain, HHM. Could a short sale be beneficial, in the sense that it would quickly be completed & over with? I'm hearing stories about foreclosures taking eons to finish - and the homes staying in the owners names in the meantime. So that would delay the 'clock' to become eligible for home ownership again in the future, and in some cases keep the homeowner still responsible for upkeep and maintenance?

On that basis, I'd think a short sale (if available) would be a good thing.

[researchnerd]

A short sale could potentially be a good thing in terms of getting the process over with...IF it happens quickly. Unfortunately, over the past couple of years I've heard many stories of short sales taking forever to close -- sometimes years -- because the banks are just as backed up with those as they are with foreclosures and modifications. I have one friend who had three different short-sale buyers and the lender wouldn't approve any of them, and each time it took several months just to get a response from the lender. It is not necessarily a quick process.

[HHM]

Want to pick your brain, HHM. Could a short sale be beneficial, in the sense that it would quickly be completed & over with? I'm hearing stories about foreclosures taking eons to finish - and the homes staying in the owners names in the meantime. So that would delay the 'clock' to become eligible for home ownership again in the future, and in some cases keep the homeowner still responsible for upkeep and maintenance?

On that basis, I'd think a short sale (if available) would be a good thing.

That is really only issue if there is an HOA. The deeded owner is responsible to the HOA until the house changes hands. Otherwise, timing is usually not an issue. I guess one caveat to this thing is that the person is in an active 13, not sure how the trustee will react to the person not actually paying a housing expenses for 6-9 months. Note, even short sales can take 4-6 months.