Any number of issues can throw your finances out of whack. For instance, you or a family member may suffer an injury or health condition that requires unexpected medical attention. Such care is expensive and, especially if your situation was unexpected, you may not be prepared to meet the cost.

Perhaps you’re in good health but recently suffered a reduction in income or lost your job altogether. Sudden unemployment is enough to prompt financial hardship in most households. Regardless of the exact cause of your current financial crisis, if your mortgage debt is high and you have no means of bringing payments up to date, you may face a short sale or foreclosure.

What’s the difference?

If you’ve never had to surrender ownership of a home before, you might not be familiar with terms, such as foreclosure or short sale. Here are some basic facts about short sales and foreclosures:


  • Foreclosure is a legal process wherein a mortgagor gives up all property rights. The process typically occurs when property owners fall behind on mortgage payments.
  • Both options are tools that can help you obtain debt relief when you have no way of paying down your mortgage debt. Although, most Florida residents would rather access other options rather than lose their homes.
  • Foreclosures typically occur when a mortgagor falls behind on three to six months’ worth of payments.
  • If you receive a Notice of Default, you should have the opportunity to satisfy your mortgage debt.

Short sales:

  • Short sales, on the other hand, occur when the sale of a home occurs under circumstances where mortgage debt exceeds the market value of the property in question, and the lien holder agrees to accept less than the amount owed.
  • Once a short sale takes place, the borrower may be relieved from all debt liability associated with the property.
  • A short sale can be time-consuming, sometimes taking several months to complete.
  • Those purchasing short sale homes may pay all closing costs, as well as expenses for any needed repairs.

In fact, you may also be able to avoid foreclosure or a short sale by pursuing other forms of debt relief, such as bankruptcy. The filing of a bankruptcy activates an automatic stay against foreclosure or other types of litigation.

How to determine the best course of action

Trying to keep your head above water can be overwhelming. When you feel this way, it can impede your ability to make informed decisions.

It can help to talk with someone experienced in debt relief, foreclosure and short sale matters. They can help you explore your options and create a plan.