If I qualify for a short sale on my underwater home, when sold am I responsible for any tax or deficiency and, if so, is there a way to prevent that with an attorney or bankruptcy?
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If I qualify for a short sale on my underwater home, when sold am I responsible for any tax or deficiency and, if so, is there a way to prevent that with an attorney or bankruptcy?
Asked on September 22, 2015 under Real Estate Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
Yes, if you short sell the house, you will be responsible for any unpaid taxes or deficiences. You could sell it to someeone who would agree to pay those things for you, but they'd have to agree--and if they didn't, it is very likely that the lender deficiency or government taxes could go after you for them.
Bankruptcy will work against a mortgage deficiency, but not against taxes not surprisingly, the government does not let you use its own bankruptcy laws against it.
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