Expert: Terry Leeders - 8/20/2008

Question
My mortgage co. just approved a short sale on my old property.  They said I was going to be 1099ed for the difference.  I do not know if I should go through with it or if I should just file bankruptcy.    All of my debt together including the house is more than my annual income.  With out the house I do not know if I would qualify to file.

Answer
You can be billed for the difference as income on your taxes.
You can surrender the home in full satisfaction and discharge any further amount, so that may be a better way to go than the short sale.  Although, then you would have a foreclosure.  You should meet with a local bankruptcy lawyer to help plan the case.