Short Sale or Foreclosure...PLEASE HELP!!!

Updated on January 07, 2011
J.S. asks from Cortland, IL
17 answers

So, my husband and I have gone thru some extremely diffiult times these past 2 years, from losing a job, being denied unemployment, and then a new job which pays literally less than half of the previous job!! Well, in the middle of all of this we fell behind on our mortgage & looked to our mtg. co. for help, literally the first day we were late! To make a long story short, our mtg. co. made a few mistakes (and NO, I'm not trying to point fingers, they admitted it), and here we are 22 months later and our modification was denied because it took too long, and we are now too far behind!! We did EVERYTHING we were suppose to and on time. But, unfortunately we now don't qualify for a modification because our income is too low to cover our current payment plus all the late fees we incurred throughout the process....
So, now we are having to make a choice--short sale or just let it go. I'm hoping some of you may have any advice or nice words of encouragement to help me out. We had our house custom built, so this is extremely hard for me, and on top of it, we have 3 small kids--7, 3, and 7mos. How do I go through with this while keeping my head up?? How do we go about starting over at 33 & 28? We definitely plan on filing bankruptcy once done so that we can get a fresh start. This is so emotionally draining, and I'm trying not to let it show in front of the kids, who, by the way, have no idea of any of this yet. We will tell them when we make a decision, and as far as they are concerned, we are moving closer to daddy's work.
Thanks so much in advance!

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answers from San Francisco on

Please spend the extra money and consult an attorney over this issue. My neighbors did a short sale but my college friend walked away. Both looked at their specific situations (type of loan, etc....) to determine what was 'best' for them.

This is too big of a decision to make over opinions given to you on a website.

Good luck.

2 moms found this helpful


answers from Minneapolis on

You need to get an attorney! That is the best and only help you really need. Shop around for the best attorney! And have them help you it will be worth it.

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answers from Atlanta on

Hi J.,

Make an effort to save your reputation with the short sale. Foreclosure will come if the short sale doesn't work. This type of stuff is not ever easy but we got in a similar situation a few years back. A short sale was not an option for us. We lost our secondary business, our primary business and our home. It was a hard thing to go through but looking back it was not the end of the world. We started over at 40 and husband was VERY successful and it came fast and blindsided us.

We are at a much better place in our lives now. We learned a lot. It solidified our family....and yes, we learned who our real friends were. TRY to take one day at a time. TRY to make your husband and your kids know that everything will be fine....(because it will)...I don't know where your faith lies but God never promised His children anything more than food in their mouths and clothes on their backs....We learned that the hard way and made it through the gauntlet.

You can hold your head up. My husband now works to assist with foreclosure mitigations. MANY people are at the same place. There is nothing to be ashamed of! I hope this helps.

God bless,


8 moms found this helpful


answers from Milwaukee on

I would consult your mortgage company AND an attorney (you can also find free legal counseling services centers) to see which would be more beneficial.

As far as bancruptcy goes-I just saw a stat that filings were up 9.3% in 2010-and we added to that percentage. My husband is self employed and I was laid off when i was 6 mo preg. Needless to say we couldn't make it on just a UC check. We were able to keep our house and car, but cleared the rest. It was demoralizing, but not hard. It costs money though-ironic, right...we went with Francis Geraci-you've prob seen the commercials-also ironic that when i used to see those i was judgemental. BUT they make it easy and professional and definately know what they are doing and answer questions readily. maybe you should talk to them FIRST before you decide you have to give up the home.

I know losing the house will be hard if you need too-but remember-all that matters is that you have your family and as the Billy Joel song says.."there your home".

Your kids will be proud of you in years to come!

3 moms found this helpful


answers from Denver on

Just know there are plenty of people in your boat and at much older ages. 33/28 is a fine age to start over. Hold your head high and move forward. I agree it might be worth it to consult an attorney.

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answers from Anchorage on

The thing about a short sell they do not tell you is that any difference between the price they get at auction and the amount you owe you have to claim as income on your taxes. My dad looked into this, He owned $120,000, and they figured they could get $65,000 - $85,000 at auction, which would mean he would have to claim and pay taxes on the other $55,000 - 35,000! He could never afford that, so he had to file for foreclosure. You really should have a lawyer helping you through this.

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answers from Minneapolis on

You should consult with a Bankruptcy Atty BEFORE allowing your home to be foreclosed on or before signing short sale paperwork. Often times, the bankruptcy filing will delay the foreclosure giving you additional time to find a new place to live and to come to terms with all of the changes going on in your life. Also, you may have the ability to work with the mortgage company through avenues you are not even aware of but a good bankruptcy attorney will know about.

I work in the bankruptcy industry and I find that most of my clients benefit from foreclosure rather than short sale - with foreclosure, it typically takes longer, there is less paperwork (there is ALOT more with a short sale), and you are going to still do all the work with showing your home as if it was for "regular" sale and run the risk of losing good offers due to the lack of cooperation from the lender (and it sounds like they have already been slow in communicating with you).

Most bankruptcy attys offer a free or low cost consultation - do it ASAP so you don't lose out on options you might otherwise have.

Good luck!

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answers from New York on

My brother walked away from his condo back when the market crashed in the 80's. He did fine. My neighbor did a short sale thinking it was an easy way to get rid of the house and ended up being on the hook for the difference between the value of the house vs the end sale price; in their case about $90,000.00.

Also bankruptcy isn't as easy to get as it use to be so you may not be able to wipe out your debt and start over again as you plan. So I guess my advice would be to consult a lawyer concerning your house situation and you finances and make decisions based on solid facts instead what you or others think may work out the best.

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answers from Las Vegas on

AWWW HUGS to you-we are in the same boat and I cried and cried and now I am just st things happen and it all works out in the end. PLEASE go see a lawyer they have free consultations for theses matters. We are doing a short sale and looks like it will prob forclose due to high volume of houses here-:(, but we tried. We also did a debt settlement-did not want to do bankruptcy-it is way different now a days. Loan modification is a joke-we did one and look where we are-LOL! Should have saved that money instead of flushing it. Good Luck in whatever you do and know U R NOT ALONE! L. :)

1 mom found this helpful


answers from Kansas City on

Sorry...your story is all to common these days. My sis and BIL just got rid of their home on short sale. I would definitely contact an attorney for advice, but here is what I know from their situation.

Short sales hurt your credit less than foreclosures. However, short sales take a long time and are not a guarantee especially if there are a lot in your area.

I would use bankruptcy as an absolute last resort. I would try to short sale your home, get a job (are you working?), rent a small apartment (2 bedrooms), and slowly pay off your bills/debts. Yes, it will take sacrifice and you may think you can't, but you can. Bankruptcy is not an easy out!

Best of Luck!

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answers from Tampa on

We just did a short sale 1 year ago. We did not have to file bankruptcy afterward. You have to make sure you will not owe any money, because some mortgage companies will come after you for money owed if you do not require an addendum stating you are no longer obligated to them for any money. Ours was a quick, smooth process. We had an offer within a month, and 2 months later we closed. However, my sister is now going through a short sale. She had an offer that was denied by her bank. It has now been 4 months and she has had no other offers. So, they might go into foreclosure. The thing about short sales, is it hits your credit for missed payments (because you stop paying your mortgage when you start the process) so that stays on your credit report for 2 years. Foreclosure stays for 7 years. So I would say start with short sale, see what happens. If you foreclose, then so be it. I think bankruptcy should be an absolute last resort, depending on how much debt you have. We didn't have a lot, so we were able to save and offer a much smaller amount to the companies than we owed. It worked out for us, we are now renting a bigger home for far less money than we were paying. But I know what you are going through. I loved our house, it was our first home, where I brought all my kids home from the hospital, and to lose it that way was very hard. Many tears shed along the way. Stay strong, this too shall pass!



answers from Cleveland on

We went through a shortsale last year, and although its been hard Id say its the way to go over forclosure. talk with your bank and see how willing they are to work with you. They'd much rather have a shortsale then foreclosure. We did NOT stop making payments during the process. We made everyone. Although we did get a 6 month period where they accepted lower payments because we were laid off. Make sure they are not going to come after for the remaining balance. GET THAT IN WRITING. If they will not agree then tell them you will let it get foreclosed on. You do have a little upper hand here because banks are overwhelmed with forclosed homes.
I'm sorry for your misfortune. I totally understand. My husband got his 2nd degree one week which his company paid for, then they laid him off the next week. Just stay strong and know that there are so many people facing hard times. Hang onto whats most important. Your babies and your health and happiness. A house can be replaced. Best of luck to you :)



answers from Chicago on

Nicole Tudisco of Wheatland Realty specializes in these two areas, therefore, I would strongly suggest talking with her. Her number is ###-###-#### and her website is If you decide to talk to her, you won't be disappointed. Tell her S. sent you. Good luck!



answers from Chicago on

Hello. I wanted to respond but don't have time to review all your responses so sorry if this is repetitive. I work for a real estate agency and we have had great success with the Law Office of Christine Garner. SHe is a short sale specialist and has a large staff that assists her in the process. They are very knowledgeable and come highly recommended by our agents.

If you call their they can talk to you about your situation and tell you the best route for your current and future situations. I would suggest calling them and seeing if they can help you. Good luck!

Christine Garner – Short Sale Specialist



answers from Chicago on

J. please call me. I have gone thru all of that and have done LOTS of research...........###-###-####



answers from Chicago on

Hi, J.. I agree with Mimi. I've been thru this (well, still actually) we've been waiting on a short-sale for going on two years and it's looking like foreclosure is probably imminent. There is a good lawyer in DeKalb who helped us with our bankruptcy and there are a couple of ways you can go. You really need to talk to someone who can give you your options and make an informed decision on what's best for you. We are renting somewhere in the same town our house is and it's been empty for almost two years. Our bank wouldn't even discuss modification with us because we'd never missed a payment - they are so backward. If you want the referral on the lawyer send me a private message and I'll be glad to give you his name. Good luck and don't beat yourself up over this - it happens to the best of people with the best of intentions.



answers from Peoria on

We went through this about 7 years ago! We were 34 & 32 and I felt like you do! I thought we would never find our way out! Hang in there it does get better! We did neither with our home we signed a deed in lieu of foreclosure so that it was not on our credit or in our bankruptcy. We talked to someone at the mortgage company and worked with him. That was his job and believe me we had waited til the last minute! We started over and it took time but we are doing great. Not rich by any means but we have learned to do without and be happy! Good Luck!

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