Foreclosure without bankruptcy?

[Whatodo]

Our primary house is a manufactured home purchased for about $160000 and is now worth about $90000. We have a ground rent of over $1000 a month.
We also have a cabin purchased for about 160000 that is now worth less than that. We have one mortgage with PMI on the primary house and still owe over $150000 on a 30 year fixed. We are current on all our payments and have excellent credit scores but have always lived paycheck to paycheck. I lost my job this year and we will soon no longer be able to make our payments. We had considered short sale but after reading this forum I don't think that is the right thing to do. The house needs lots of work and the ground rent increases every six months. We don't really have much in the way of assets except for a couple of very used vehicles.
Would it be safest for us to go bankrupt and let them foreclose or just go through the foreclosure process without bankruptcy? We will probably be moving in permanently with an aging parent so we really don't have to worry about purchasing another house but we dont' want to take the chance of losing anything.
Thank you and sorry for my somewhat rambling post

[Amy26]

Depending on what state you live in, if you just let it go into foreclosure without the bankruptcy backing you up, they can pursue you for the difference between what the house is worth and what you owe. Also, if by chance they just "forgive" the difference, you will get a 1099 for it and have to pay taxes on what they forgive.

Doing it with a bankruptcy is much better, in my opinion, because you have the protection of the court and the bankruptcy itself. With a bankruptcy, you are protected from having to pay any difference between the sale price and the owed price.

Also, if you just let it go into foreclosure and then something else financially happens to you and pushes you into a bankruptcy later, then you will have two negative hits against you.

Hope that helps a little.