February 1st, 2010 by Reed Allmand 
When facing an imminent foreclosure, a homeowner who can no longer afford his/her home is faced with many difficult decisions. One of the most important decisions will be whether the homeowner should do a short sale or file bankruptcy. Here are a few questions you should ask yourself when deciding to do a short sale or file bankruptcy?
- Do you have other debts that you cannot afford to pay? Most homeowners facing foreclosure are drowning in credit card debt, delinquent car loans and sometimes even mounting medical debt. Doing a short sale on your home might solve your home problem; but it wouldn’t resolve your other issues. When you file bankruptcy, the court can allow you to surrender your home and discharge any debts you may owe such as credit card debt and medical bills.
- Do you want to keep you home? This is a tough question especially if you don’t have a significant income. But depending on your situation you may be able to avoid foreclosure and keep your home even with a small income using bankruptcy. If you even have the notion that you want to keep your home you may want to discuss your bankruptcy options with a bankruptcy attorney.
Will your lender forgive the mortgage balance? When you do a short sale, the home is sold for less than what you owe on the mortgage. At the end of the sell, you don’t make any profit and you still owe the lender the balance. If your lender is not willing to forgive the balance you’ve just added another bill to your list of problems. But in bankruptcy even if a home is surrendered to the lender, the borrower does not owe the balance of the loan. The bankruptcy court forgives the balance while discharging other debts.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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