Most homeowners would think that once you have filed bankruptcy that there is no reason to short sale your home. Once your bankruptcy is discharged and your house is foreclosed, your mindset may be “I will not owe on it anyway”. However, just because a short sale seems like more of a hassle than a help, that is not the case.
The reason to follow through with a short sale after your bankruptcy discharge is the impact to your credit standing. If you plan to own another home down the road, a short sale is definitely the way to go. After a short sale, you may be eligible to re-establish yourself as a homeowner in as little as two years if you qualify for a mortgage through Fannie Mae or Freddie Mac. Although two years seems like a long time to wait, foreclosure or a bankruptcy / foreclosure combination can result in a waiting period ranging from three to seven years. Two years seems like nothing in comparison.
Of course, depending on your circumstances, the waiting period after a short sale could be even shorter than the standard two years. If your bankruptcy filing and short sale was the result of extenuating circumstances such as: substantial income loss, a serious financial event, or something exceptional, you may be able to apply for that shorter waiting period before becoming a homeowner again. A short sale is probably the way to go after bankruptcy.
Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.
The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.