Short Sale Attorney In Chicago, Illinois

Short Sale Vs. Foreclosure

A short sale is typically preferable to foreclosure when it comes to your credit score and future homeownership. A short sale has a less detrimental effect on your credit than a foreclosure. That means that you will be able to get back into homeownership sooner than with a foreclosure.

There are two aspects to a short sale that require some attention: the deficiency and the tax consequences of the sale.

DEFICIENCY OF THE SALE

What the bank refers to as the deficiency is the difference between the amount it is owed and the amount the home sells for. If your home sells for less than its fair market value, your lender can seek a judgment against you. This means that the bank can still try to collect on the difference.



For example, if your home sells for $50,000 below its value, your lender can use collection methods, such as wage garnishment or levying your bank account.

Our short sale lawyers can negotiate with your bank to avoid or minimize the deficiency. Further, if the bank does decide to pursue a deficiency, we can negotiate that the repayment occurs over time as a loan. In the end, this can actually help you start rebuilding your credit.

TAX CONSEQUENCES OF A SHORT SALE

Many factors affect the tax implications of the short sale of your home, such as the type of loan, the disposition of the lender and your financial status. The tax consequence of a particular short sale should be discussed with a tax professional.