Expert: Terry Leeders - 6/5/2009

Question
We are currently in Ch.13 bankruptcy and paying payments to the plan. We have an opportunity to sell our home to a couple through short sale. We were told by our lawyers that we would have to dismiss our Ch.13 case to let the short sale take place therefore letting the creditors come after us for their money. Is this true? We are in the state of Maryland and confused as to what the best option is for us.

Answer
It depends. The court and trustee would need to approve the short sale. Each state & jurisdiction is different, so have the attorneys explain why they suggested what they did.  You may be able to consider a conversion to chapter 7 depending on other assets and income, so ask about that as well.