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"short sale"

Posted on: 11th Aug, 2007 10:01 pm
Could someone please explain what is a \"short sale\" I am debaing whether to file 13 or not and I have been reading in the forum and I see mention of this word. Pls advise. Thanks
Hi Malena,

In a declining housing market, the value of a home sometimes falls below what is owed on it. When you can no longer pay the amount owed, you may go for a short sale - a sale in which the proceeds fall short of what you owe. But since you're asking lender to accept less money than you promised to pay, there is no guarantee that they will accept such a sale.

For a short sale, you must find a buyer willing to purchase your house at market value. This market value can be determined by a formal appraisal. Though this process avoids the negative affect of foreclosure on your credit report, you may still face a tax liability on the amount of debt forgiven.

And, if you have a regular income, Chapter 13 may allow you to keep the property that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your income towards the payment of your debts during a three-to-five-year period, rather than surrendering the property. After you have made all the payments under the plan, you receive a discharge of certain debts.

Now, it is up to you to decide which option is best suited to you. For guidance, you can take the help of a lawyer and may consult with him.
Posted on: 12th Aug, 2007 09:14 pm
Thank you Larry, you have been a great help.
Posted on: 12th Aug, 2007 10:19 pm
Hi Malena,

Welcome back to the forum.

It is my pleasure to help you. If you have some more queries, please feel free to ask.
Posted on: 13th Aug, 2007 01:20 am
hi malena,

welcome to our forums.

it's good to have you back amongst us. but i think you are into financial trouble or else why would you think of filing a chapter 13 bankruptcy.

first of all what matters is what other ways have you tried to get yourself out of the trouble. though chapter 13 helps you to repay your debt using an alternative payment plan, yet you don't repay it fully often and it lowers your credit score too. so, i usually suggest people to stay away from bankruptcy but then there are certain situations which perhaps we cannot avoid and then bankruptcy becomes our one and only option.

secondly, it's the means test that will decide whether you can file chapter 13 or chapter 7. this is allowed as per the bankruptcy law, 2005. the court-appointed trustee decides whether your income is sufficient enough to make it possible for you to pay the entire debt or a part of it or whether you are financially not sound enough to follow a chapter 13 repayment plan.

however, you can for yourself check if you qualify for chapter 7 or 13 from the section on this topic.

good luck :)
Posted on: 13th Aug, 2007 05:15 am
if i file for bankruptcy can the 2nd mortage come after me for the balance
Posted on: 28th Oct, 2009 06:05 pm
hi andrea,

if your second mortgage debt gets discharged through chapter 7 bankruptcy, you will not be personally liable for the loan balance. however, the second lien will still remain on the property and it will have to be paid to save the house from foreclosure. in chapter 13 bankruptcy, the second lien can be stripped off your property if there is not enough equity in your house.
Posted on: 30th Oct, 2009 01:40 am
Im in the process of a shortsale is it to late to file chapter 13?
Posted on: 26th Jan, 2010 10:32 pm
Hi diana,

It's not too late to file bankruptcy chapter 13. You can file Chapter 13. I don't think the lender will have any problem with that because when you file Chapter 13, you actually show your intention to pay off your debts. But you should keep it in mind that your credit will be affected by the bankruptcy and will show up on your credit report for 7 years. However, if you follow your repayment plan and pay off your debts, it will have some positive effect on your credit scores.
Posted on: 27th Jan, 2010 01:46 am
What happens to your house after chapter 13 plan is completed?
Posted on: 10th May, 2010 09:02 pm
Hi Guest,

If you pay off the mortgage as per the repayment plan, you will be able to get the bankruptcy filing discharged. Also, you will be able to get rid of the mortgage.

Take care.
Posted on: 11th May, 2010 02:04 am
We are in the middle of a ch.13. We only owe on our house but it's alot. We make payments to the trustee for our second I think and we pay Wells Fargo a mortgage payment but it's not the whole mortgage's what our lawyer told us to pay... If this plan is approved by the trustee and we complete our 60 mos. What happens to our mortgage payments? Can the bank foreclose on us at that time?
Posted on: 19th Jul, 2010 08:00 pm
Hi Dina!

Welcome to forums!

Your are given a payment plan based on your income. If you pay the stipulated amount to the trustee every month, then your bankruptcy would be successfully discharged and you won't be liable for paying off any dues.

Feel free to ask if you've further queries.

Posted on: 19th Jul, 2010 11:49 pm
will my amount of payment on chapter 13 changes if i do short sale on my house?
Posted on: 13th Sep, 2010 02:24 pm
Hi nicke!

Welcome to forums!

If you short sale your property, you won't have to make the mortgage payments any longer. Thus, there are chances that your payment amount on chapter 13 will change once you short sale your property.

Feel free to ask if you've further queries.

Posted on: 14th Sep, 2010 02:52 am
I have just heard the bad news, my loan mod declined. I am already 11 months behind on my payments. I have waited 9 months and had my paperwork lost and resubmitted 4 times waiting for loan modification response. Foreclosure process inititaed and home is set to auction December 30, 2010. What would be the best course of action? Short sale or Chapter13? I'm so frustrated because I waited on their bumbling bafoonism only to be declined because I had saved $6k, therefore, had 4 months worth or reserves (payments) and thus, DECLINED. Any guiding wisdom?
Posted on: 09th Nov, 2010 06:59 pm
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