If you do not know the answer to these questions you should consult competent professional advice.
Not sure who is handling the short sale but things to keep in mind are.
Make sure the short sale approval letter reads...
Debt will be reported as satisfied, not as settled.
And that bank will provide a 1099 form, proving they forgave the balance owed. You must take the form to your accountant for filing your next tax return.
If those two conditions are not met, the window is left open for the bank to come after you for the amount owed on the note (which is unlikely if it was a primary residence, but 50% chance if it was second home or investment property).
If you do not already have an attorney, call your local Realtor association and ask them for an affiliate real Estate attorney. They will usually provide a first consultation for free.
I am not an attorney or accountant, so this is just general information, only them 2 can give you specific information to your situation.
Was this helpful? If so, the "thumbs up" will be appreciated.
Charles Rutenberg Realty