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Ask Terry L. Your Own Question
Terry L.
Terry L., Attorney
Category: Bankruptcy Law
Satisfied Customers: 2820
Experience:  Better Business Bureau. 18yrs bankruptcy experience. Chicago Bar Assoc. American Bankruptcy Institute member.
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If the bank accepts a short sale price and does not discharge

Customer Question

If the bank accepts a short sale price and does not discharge the remainder monies owed, if you file bankruptcy will this protect your equity in your primary home?


Thanks
Submitted: 6 years ago.
Category: Bankruptcy Law
Expert:  Terry L. replied 6 years ago.

Terry L. :

Hi and thank you for your question. In the future, you can request me to answer any further questions.

Terry L. :

Yes, if the equity is protected by the Illinois homestead exemption when you file, and the lender has not previously put a lien on the home before your bankruptcy. Then yes, it would be discharged in your bankruptcy.

Terry L. :

Usually though, a short sale does discharge the remaining money owed.

Terry L. :

They discount the payoff to close the deal.

Terry L. :

The discount however, is taxable as income to you, which would not be discharged in a bankruptcy case.

Terry L. :

Thanks for your question, good luck.

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