Should I file bankruptcy before or after my home goes into foreclosure or shouldI instead proceed with an approvedshort sale?

UPDATED: May 31, 2011

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Should I file bankruptcy before or after my home goes into foreclosure or shouldI instead proceed with an approvedshort sale?

I am facing foreclosure however the bank has approved me for a short sale. I really do not know which is better because they both are negative on your credit report. What should I do?

Asked on May 31, 2011 under Real Estate Law, Pennsylvania


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You really need to sit down with a bankruptcy attorney or other qualified financial professional to discuss the specifics of your financial situation.  For instance what, if any, other debt do you owe? What assets are at risk (do you own any exempt property)? A bankruptcy is a big step and one can only be filed  as often as statutorily allowed (depending on the Chapter filed you can only file every 8-10 years or so). Granted your credit report will take a hit either way, but with a short sale a negative notation will only remain on for 7 years; a bankruptcy will be reported for 10 years.  Again, consult with a qualified professional regarding this.

Note:  If you do opt for bankruptcy, file sooner than later as deficiency judgments are permitted in PA. And the sooner that you file the sooner your credit will clear.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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