Why Short Sale and not just file Bankruptcy?

So many people who are behind on their mortgages are considering bankruptcy.  The reality is that the bankruptcy delays the foreclosure; it does not stop the foreclosure.  If a person files bankruptcy the trustee assigned to the case orders an appraisal on the home.  If the seller cannot bring the payments current and there is equity in the home the trustee assigned to the case will sell the property to pay the creditors and the bank with the equity from the sale.  

If there is no equity the judge will allow the seller to stay in the home and the bank will proceed with the foreclosure.  The seller still has the right at that point to sell the home short of the mortgage balance, thus called a short sale.  The seller will have a bankruptcy on their credit but not a foreclosure.  This may sound troublesome, frustrating and down right confusing but that is why you hire me to work with the bank on your behalf.  Let me know if I can help.