Hi - my name is XXXXX XXXXX I'm a litigation attorney here to assist you.
What chapter of bankruptcy are you going to file - 7 or 13?
Thanks. If you file Chapter 7, a short sale is likely out of the question as the lender would be better off just to get an order lifting the automatic stay (stay entered by the bankruptcy court to stop all collection proceedings) and proceed with the foreclosure.
However, if you're in the process of a loan modification, the lender would likely continue to work with you if you're willing to re-affirm the debt and stay in the house and continue to make payments on the property. If you re-affirm the debt it will survive bankruptcy. If you want to keep the house, this is the way to go.
Bear in mind, however, that if you file bankruptcy and the loan modification is not approved, the lender would be in a position to foreclose after lifting the automatic stay as I discussed above.
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