Hi Melody

Step one-consult an attorney. We have one that we work hand in hand with to consult all our clients prior to listing short sales. Sometimes those clients are able to modify, sometimes they can do a deed in lieu, and sometimes the only option is to foreclose. Whatever your goal is, we get a game plan together.

Before you file anything, understand that if you're just now defaulting on your loan, then the bank will not be moving that quickly. If it's your primary residence, you should be able to benefit from the new legislature. Call or email me for more info:
Amanda Sarnes, Realtor
Smart Realty Group
407-702-7302

Didn't see a "reply" feature, just wanted to thank everyone for their suggestions and time.

I did contact a lawyer about bankruptcy last year, but since a few things have changed I need to talk to someone again. Plus, I wasn't totally thrilled with the person I contacted after doing more research. I will contact the local Pro's for their offered advice. Thanks to you and anyone else who might respond!

Like others have said, every situation will be different, and yours in particular looks like it will be complicated. In general though, simply walking away should be your last resort. It is still your house even if you are behind on payments and you do have options on how to keep it. Even if foreclosure ends up being your best option it can take up to 6-14 months in some cases for the foreclosure to actually occur, so not need to vacate immediately.

Your first choice should be to consult with an attorney, I have one I can recommend that would be willing to give you a free consultation, at the very least he will open your eyes as to what options may be available to you. Whether short sale, Ch13, Ch7, Deed in lieu, or foreclosure.

No question about it, the short sale is the better option. Walking away will wipe out your credit rating for 7 years, A short sale will cost you points off your credit score. It's better to have a reduced credit rating than none at all.

Good afternoon Melody.

First, let me say I'm sorry to hear that you are caught up in this downturn in the economy and your business is suffering like most are these days.

This is far too difficult to analyze on Trulia and come up with the very best solution for your specific situation. Have you consulted an accountant and an attorney? There are dozens of questions to be asked before anyone can determine what is best for you.

You mention filing bankruptcy and that this debt is from a second loan and not acquisition debt. You want to make sure you don't decide to do a short sale before you know the consequences related to possible deficiency judgements and tax liability. My understanding is the rules change rather dramatically if it's not debt from the purchase of the home.

My advice: Please speak with an accountant and attorney who are familiar with the new laws before doing anything. I hope this works out as well as possible for you and wish you the very best!

Marty

Marty Hunt, Realtor®, ABR, CRS, GRI, e-PRO
Realty Executives Orlando
Office: (407) 869-7779 Cell: (407) 619-2640
Toll Free: (888) 412-8681 Fax: (407) 478-1351
Email: mailto:marty@martyhunt.com
Web Site: http://www.MartyHunt.com

Dear Melody,
You have many difficult situations to deal with at the moment. You should always consult a lawyer or tax specialist to better understand related ramifications. Every short sale situation is different but our understanding is that it is not quite the negative reflection on your credit as an actual foreclosure. If you can attempt to keep your credit in good shape, this should help you in the long run. We have short sale listings now and would be happy to discuss your options with you. Please feel free to call or email me.
Thank you,
Joyce Dowd
jdowd@coldwellbanker.com
407-341-3655