Hi everyone,
As I write this, I am sending in my monthly payment to my trustee with only 3 payments left in our plan. I anticipate our discharge possibly around July giving the trustee 2 months for the final audits.
Last week, a realtor said she had a potential buyer interested in a short sale of our property and she could even get us a few thousand dollars out of the sale. I cleaned the house and the buyer never showed up but now the realtor wants to formally list the house on the market as a short sale.
Up to this point I had no intention of doing a short sale; the mortgages will be discharged and the short sale is a hassle with no benefits for me. Tonight I did some research on the internet and I read that if the short sale occurs after the BK discharge and I sign the sale paperwork post BK, I could be liable for the deficiency amount between what I owed the bank and what the house sold for. I know I could file an IRS form 956 to claim I'm insolvent but after a BK, if my total debts (which will be zero except for a small student loan that survived the BK) doesn't exceed the fair market value of my assets (I have 4 cars), then I can't claim insolvency.
Also, there is a HELOC on the house with a different company and that complicates the short sale dramatically. I would have to have not only the first but the HELOC put in writing that I won't be held responsible for the deficiency balance.
Plus then there are liability issues if I don't fully disclose any problems with the property (You know people out there will try anything and everything these days to sock it to whomever) and if I were sued for it post BK, I don't have the option of filing BK to discharge that suit.
On the pro side, my name could get off the title quicker with a short sale and I could get a few extra bucks to help us out with our fresh start.
What are your thoughts on this? This realtor wants to meet with me in a few days and my inclination is to decline and just let the foreclosure happeen.
As I write this, I am sending in my monthly payment to my trustee with only 3 payments left in our plan. I anticipate our discharge possibly around July giving the trustee 2 months for the final audits.
Last week, a realtor said she had a potential buyer interested in a short sale of our property and she could even get us a few thousand dollars out of the sale. I cleaned the house and the buyer never showed up but now the realtor wants to formally list the house on the market as a short sale.
Up to this point I had no intention of doing a short sale; the mortgages will be discharged and the short sale is a hassle with no benefits for me. Tonight I did some research on the internet and I read that if the short sale occurs after the BK discharge and I sign the sale paperwork post BK, I could be liable for the deficiency amount between what I owed the bank and what the house sold for. I know I could file an IRS form 956 to claim I'm insolvent but after a BK, if my total debts (which will be zero except for a small student loan that survived the BK) doesn't exceed the fair market value of my assets (I have 4 cars), then I can't claim insolvency.
Also, there is a HELOC on the house with a different company and that complicates the short sale dramatically. I would have to have not only the first but the HELOC put in writing that I won't be held responsible for the deficiency balance.
Plus then there are liability issues if I don't fully disclose any problems with the property (You know people out there will try anything and everything these days to sock it to whomever) and if I were sued for it post BK, I don't have the option of filing BK to discharge that suit.
On the pro side, my name could get off the title quicker with a short sale and I could get a few extra bucks to help us out with our fresh start.
What are your thoughts on this? This realtor wants to meet with me in a few days and my inclination is to decline and just let the foreclosure happeen.
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