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Short sale vs. foreclosure post bankruptcy?

Strasburg, CO |

We filed Chapter 7 four years ago, and our mortgage was included in the bankruptcy. However, now we're moving out of state and will be forced to let the house go. It's worth much less than what we owe. I know a short sale and foreclosure are both bad on our credit. With the bankruptcy, which one is best for us (financially and getting into a new house sooner)? With a foreclosure, are we looking at an additional 7 years of bad credit?

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Attorney answers 3


It isn't so much your consumer credit that matters with a foreclosure, it is the fact that you can be put on a mortgage blacklist under a federal program called CAIVRS if you have a federally backed loan. See more info at the link below. A short sale will always make it easier for you to obtain mortgage financing in the future even if the foreclosure itself doesn't appear on your consumer credit report as a result of your bankruptcy. Hope this perspective helps!


Definitely a short sale is preferable to a foreclosure for many of the reasons that Ms. Bunce noted.

The information provided in this answer does not create an attorney-client relationship. If you are interested in his legal services, feel free to call Chris at (303) 409-7635 at his law office in the Denver Tech Center. All initial consultations are free of charge.


Go with the short sale or a deed in lieu.

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