Do you owe more on your home than it is worth? Do you really want to stay in your home but think you need to sell? Think again. People often contemplate a short sale when they are underwater on their home mortgage and are having a hard time making ends meet. It may seem like a good financial choice but always isn’t. Seeking legal advice from a bankruptcy attorney before you sell is important. The bankruptcy attorneys at Hines Law serving the surrounding Boston area are experienced and ready to inform you of your choices.
A short sale typically means that the homeowner must move out right away.
Stressful, to say the least. Homeowners in jeopardy of foreclosure may turn to a short sale in order to preserve their credit and banks prefer a short sale over foreclosure on a home. Where does that leave the homeowner? Homeless. In a Chapter 7 Bankruptcy, the homeowner does not have to immediately move out of the house. Their liability on the note is discharged and they can continue to live in the house until there is a judgment. If the homeowner wants to leave, this gives them time to regroup and make a plan instead of being forced to leave immediately.
Another aspect of Chapter 7 that may be a better option than a short sale is the tax advantage. In a short sale, the homeowner will have to pay taxes on the amount forgiven by the lender. This is because debt forgiveness by the lender is considered income and is subject to income taxes. In a Chapter 7 Bankruptcy, there is no tax liability to the debt forgiven as a result of filing. Something to think about!
Negotiating any financial transaction with a lender can be complicated, especially when you are struggling financially and feel that you are out of options. Bankruptcy may be an option for you with a number of advantages involving your home. It is important to seek legal advice from an experienced bankruptcy attorney. Hines Law is able to help you make the right decision for your situation. Call us today for a free consultation!