Foreclosure in Aspen>Question Details

Tan11man, Real Estate Pro in Aspen, CO

Is a short sale, Bankruptsy or short sale which will hurt less in tax issues and other investments?

Asked by Tan11man, Aspen, CO Sun Dec 5, 2010

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As an attorney and a Realtor, I strongly urge you to seek professional advice. There are so many ways to meander through the maze. I have helped many clients sell their properties in short sale and have gotten their deficiency judgements waived. I have recommended foreclosure to other clients. I have other clients who benefited most from bankruptcy. The tax issues are different for each. You do not need to be strapped with debt for the rest of your life. There are solutions. Call me at 970-925-6688. Wendy Lucas
0 votes Thank Flag Link Tue Dec 28, 2010
i would rather owe the bank money than the IRS money. if you go bankrupt you dont have to pay taxes on forgiven debt. i think there are many advantages to filing BK that brokers and creditors wont admit to you
0 votes Thank Flag Link Mon Dec 6, 2010
Every case is different. The personal financial situation of the individual(s) involved, as well as the loan(s) and financial institutions will play a part in the "best" outcome. Probably the best thing to do is to consult an attorney who specializes in these situations, as well as a financial advisor with experience in the same.
0 votes Thank Flag Link Mon Dec 6, 2010
This is a very good question-and unfortunately there is not one simple answer as there are many variables. Obviously we have to encourage you to seek proper counsel since we are all real estate professionals and not tax or bankruptcy attorneys. That being said, short sales do allow you to purchase a home again in a shorter time frame and have a much smaller impact on your credit. An individual may pursue a short sale granting they have endured a hardship; a death in the family, a loss of a spouse through divorce, a loss of employment or massive medical bills/health challenges. If a hardship cannot be proven than a short sale may not even be an option. Please be aware that selling a house in short sale does not automatically release you of the deficit from the short that is owed to the bank. Many banks retain the right to pursue the owners for the balance after the short sale has occurred-the bank is only allowed the sale to occurr and agreeing to release the lien on the house so ownership may transfer to the new owner. Bankruptcy, on the other hand, wipes the slate clean, damages your credit more significantly and creates a challenge for purchasing another home for at least 7 years.
Please let me know if you are in need of outstanding agent referrals in Aspen. All the best to you!
Sincerely,
Laura Stewart
0 votes Thank Flag Link Sun Dec 5, 2010
Hello Tan11man,

I think this link may help answer some of your questions: http://img.pr.com/release-file/0905/151627/forcvsshort.pdf

A lender and friend that I trust very much tells me that he knows of quite a few homeowners who used the following program: http://www.naca.com/refinance/refinanceTenStep.jsp

Chapter 13 has been what some people that I know have decided was the best solution for them.

Many people find that Short Sale is best for their situation. There's not one perfect answer, you need to explore the options and of course talk to an Attorney and decide what works best for you.

I hope you find your answer and that a year from now everything will be looking good again. If a Short Sale is your best option, I know of a couple of very good Realtors in Aspen that can get you through it as painlessly as possible.

Sandy Kinslow
The Kinslow Team LLC
Coldwell Banker Residential Brokerage
kinslowteam@aol.com
0 votes Thank Flag Link Sun Dec 5, 2010
I would consult a tax attorney for tax & investment issues. As far as affect on credit score, a short sale is better than bankruptcy. A short sale will negatively affect your credit score for only 3 years, whereas a foreclosure or bankruptcy could be as much as 7 years.
Web Reference: http://www.sallygrenier.com
0 votes Thank Flag Link Sun Dec 5, 2010
Hi Tan

I would consult your tax attorney or accountant on that one. In California there are laws that protect you from tax issues due to a short sale. BK can best be answered by an attorney.

Good Luck
Chris Blasic
Realty World
0 votes Thank Flag Link Sun Dec 5, 2010
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