Short sale & ch 7 bk

[mand15]

I am really in a "pickle" as my mom would say. i experienced a 60% cut in wages last year, which obviously affected my finances. last july i withdrew about $20K out of my 401K. not realizing it would hinder my ch 7 bk filing because it was viewed as income. so at the point where i would be able to file, but the plot thickens.

home has been on the mkt for 10 mos, got an offer a very low offer. trying to sell via short sale. this process started end of jan and my attorney is telling me it could take months. my wages have gone up (not enough unfortunately to take care of the unsec debt) so i need to file ch 7 by end of april. it gets worse, 2 of my creditors (amex) have now sued me for full pmt. obviously can't pay this so my attorney is pushing this off for as long as possible to hopefully allow the short sale to go thru and then the bk immediately after.

my bk attorney is advising to get out of contract for the short sale. but i worry if i do that, i will have a fc on my hands. currently 3 mos behind on mtg, filed act 91, etc. i understand there is possible a way to do the short sale and bk at the same time, but my attorney says it's too risky. plus i'd have to let the buyer know and i don't even want to get into that.

anyone have experience with short sales and length of time they take to get approved? and do they hinder you filing a ch 7 immediately after?

[HHM]

Well, there is no difference between a short sale and foreclosure (IN ANY RESPECT), so there really is no point in continuing the SS if you are walking away from house.

[mand15]

thanks for the response i agree it's mostly of the same, but for my situation i'm trying to avoid a fc. one, i live in a community of townhomes and i don't want my neighbors to find out how bad my financial situation is. there is a lot of chitchat and gossip that goes on.

also i work in the banking industry and feel if word of a fc gets out, it will affect my reputation and my working relationship with realtors that send me referrals. the other thing is it appears "slightly better" on a credit report to have a short sale then a fc.

i know my bk will affect my credit...actually my credit is shot right now anyways...i'm just struggling on making the right decision. i also wonder if the ssale doesn't go through and i file bk if the mtg co will do a loan modification if i'll by some miracle be able to stay in the house until i can get a better price for it. the whole thing is a nightmare.