Quote Originally Posted by BVos View Post
Actually lots of mortgage companies are doing short sales these days where they'll write off the difference between sales price and remaining principle and not sue you for that loss. The advantage to short selling is it hits your credit for 2-3 years instead of 7 years like a foreclosure and the bank/collectors won't come after you for losses they've incurred. No need to file bankruptcy after a short sale. So you can just really "walk away" these days..
What bank and who specifically do you know that pulled this off? I had a friend who tried that. The bank said you've got a job and we'll sue you for the loss if you walk away. The only option is to file for bankruptcy. Short saleing is not a foreclosure and is pretty automatic under standard mortgage clauses. Threatening to file for bankruptcy isn't leverage in getting a bank to write off a big chunk of the debt you owe. I had another friend who filed for bankruptcy, gave the keys back and the bank still got the trustee to garnish his wages to pay a chunk of that difference off for another year.