Bankruptcy and short sales

What is a short sale? A short sale is when a lender allows a person to sell their house for a quantity that is not large enough to pay off the mortgage owed. Lenders wanting to avoid the foreclosure process, for example, will agree to a short sale and a foreclosure will thus be prevented. When people are experiencing financial problems, it is common for them to consider selling their house using this method to get out of a taxing mortgage. Unfortunately, a short sale leads to obvious complications when bankruptcy is involved.

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