She can do a short sale or foreclose on the house if she filed bankruptcy so long as she did not reaffirm the debt and the debt has been discharged. If she did reaffirm the debt then she can shortsale the house and it depends on what the lender negotiates. They may ask for a promissory note or ask for a contribution at closing. Either way she should hire an attorney to negotiate the deficiency. (Our law firm Kung & Associates can assist you with this or feel free to hire an attorney you trust) Sometimes, the lender will pay for the attorney negotiation fees if you ask for them on the HUD I. If she reaffirmed the debt, she should not foreclose, because the lender can pursue her.
If her bankruptcy is still ongoing and has not been discharged, then she can retain her attorney to file a stipulation (basically a legal document signed by both parties and the judge) stating that they agree to allow her to sell the home.
To see if she reaffirmed the debt, check the petition, or ask your attorney. You also may have reaffirmed the debt if she signed something after she filed bk., thereby entering into a new contract not included in the bankruptcy. If you are married then the lender may sue you, since NV is a community property state, it would be up to you to defend.
A person can sue you for anything, I could sue you for wearing the wrong colored clothing, it is up to you to defend, but this can get costly. You would have to bring up defenses, such as debt entered into prior to marriage, etc.
If she wants to short sale her home, she will have to get someone not in the family to list the house and someone not in your brokerage as there can be no relationship, unless of course you want to do it without compensation. Let me know if you need anything.
Realtor @ Keller Williams Marketplace I
Attorney @ Kung & Associates Law Firm (we practice in bankruptcy, real estate, collections, and most other matters)