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Yes, your house can still be foreclosed by the lender. The lender will have to get permission from the bankruptcy court to foreclose (they will file a petition to lift the automatic stay).
If you are already in bankruptcy, a foreclosure is not going to harm your credit that much.
Also, a short sale is not going to help you any in a Chapter 7. The debt is going to be discharged anyway, so there's no advantage to doing a short sale.
My Realtor keeps telling me that after the bankruptcy discharge I can short sale my property so that I don't have a bk and a foreclosure. He said that a lender will lend to me with a bankruptcy, and if I do a short sale I will be able to get an FHA loan within 18 to 24 months. I am now looking to the future.
I don't have the money to hire a lawyer but have hopes to make the right decision. Do you think that I should just claim a bk and foreclosure? without looking at a short sale???
There is no real advantage of doing a short sale - other than to keep a foreclosure from appearing on your credit. My experience is that your credit is going to be in bad shape for 7 years anyway because of the bankruptcy, so the foreclosure is not going to hurt that much.
However, your realtor should be given some deference if he/she has seen a bankrupt get a loan where there is no foreclosure. She certainly knows the pulse of your area better than I. What she's saying has not been my experience, but that doesn't mean it can't happen the way she says.
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