Pro’s and Con’s of a Short Sale Vs. a Bankruptcy in Chicago IL
A Chicago Real Estate attorney knows that there are pros and cons with either a short sale or bankruptcy. Both of these matters are very delicate situations. There is really no simple answer. After weighing all of your options, including a bankruptcy, a short sale should be considered.
Instead of a foreclosure sale in a down market, many times a better alternative for a lender is to take less money than is actually owed, what is called a short sale. Before the short sale actually occurs, the lender will review all the borrowers assets among other things, to see how the best deal can be constructed.
Any amount of debt over $600 needs to be reported to the IRS as income to the borrower. It is not money that was received, but money that is taxable. Debt forgiveness received in a bankruptcy on the other hand is not taxable.
When a short sale is successful, the homeowner has some control over their future. The homeowner can save their credit rating and avoid bankruptcy with a successful short sale. One thing that is very important to remember is that short sales do take some time, and are often times very difficult to negotiate.
One thing that is important to consider is the overall debt picture of the homeowner. Mortgage payments may be resolved with a short sale, but other debts may be better resolved with a bankruptcy.
Every situation is very different. To really know what your best options are, call a Chicago real estate attorney. They will be the most knowledgeable and experienced to offer you a solution. Call us today to see if you would benefit from the help of a Chicago real estate attorney.