Several years ago, when I first began buying short sales, I always felt a little unsure when a homeowner facing foreclosure would ask me about bankruptcy. Sure, I knew what bankruptcy was, and the different types, etc., But how did all that relate to the foreclosure process? And why were so many bankruptcy attorneys recommending that their clients file a Chapter 13 and if necessary (and it usually is) a Chapter 7 in lieu of a short sale?
I've jotted down some quick notes here that hopefully will be helpful the next time a seller facing foreclosure asks about bankruptcy.
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