[dhosek]

I went through a short sale in 1996 and as it turned out, the taxes that I ended up owing were identical to how much I was behind on my mortgage. One of the things that I had been told over and over back then was that I didn’t want to declare bankruptcy, but in retrospect, it turns out that declaring bankruptcy would have been exactly what I wanted to do.

I remember thinking during the mortgage crisis when folks were often underwater by $100K or more that the taxes would end up killing them on short sales. I wasn’t paying enough attention to know about the 2007 debt relief act since I was a renter at that point.

[firesteelrain]

That period of time was very rough. We bought our first home in 2006 for $134k and by 2007 it was worth about $59k. Even after adding on to it by converting our porch to another room, we ran out of room fast with the birth of our second child. I had one bedroom for one child who was about 5 or 6 and the second shared it with us. Since we couldn’t sell it with that much difference - we simply didn’t have the money to make up that difference - we ended up conducting a short sale in 2012. I rented until 2014 then used the VA Home Loan to buy my home which I have lived in for the past 10 years. It took 7 years to clear my credit report. But VA was very forgiving and the banks were OK to provide a mortgage at that time with VA backing. So it was less of a risk.