Although short sales are common, the benefit for a homeowner who has received (or expects to receive) a bankruptcy discharge is much less clear. The bankruptcy discharge eliminates the homeowner’s personal liability on the mortgage loan and the potential tax consequences of debt cancellation which are two reasons non-bankrupt homeowners often pursue short sales. Furthermore, arranging a short sale may require time and money (especially if the bankruptcy case is still pending). If the homeowner is still occupying the dwelling and is benefiting from that arrangement then a short sale may require the homeowner to relocate faster as compared to allowing the foreclosure process to run its course. That said, if the homeowner is not occupying the dwelling or otherwise benefiting (e.g. collecting rent) from the ownership then short sale allows the ownership to transfer so that the homeowner has no responsibilities associated with the ownership such as paying property taxes, paying dues to a homeowners association, maintaining the property to the satisfaction of the homeowners association and/or municipality, etc. So the benefit of short sale is more clear for non-occupants but less clear for the occupants.
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For more than 20 years, the Sasser Law Firm has been helping individuals and business owners sort through financial hardships to see the light at the end of the tunnel. Our North Carolina bankruptcy attorneys are all board-certified specialists, which means we have passed a complex exam, undergone a thorough peer review, and continue to earn legal education credits in this ever-evolving area of law.