Hi, I want to know whats best for our situation deed in lieu or shortsale getting any info from the realtor is like pulling teeth

A short sale would be much better for your credit.  In addition to the fact that you filed bankruptcy (which will stay on your credit for approximately 10 years), a deed in lieu of foreclosure will look much worse on your credit report than a short sale (which should be reported as settled for less than amount owed).  In addition, any delinquent house payments that occurred after the date that you filed bankruptcy can not be reported under the Bankruptcy Laws and the Fair Credit Reporting Act.  Make sure you check your credit report consistently to ensure that there is no delinquent reporting by your creditors. As for recovering money you put in, it is unlikely, even in a short sale, unless there is significant equity in the home.  If you are "underwater" on the house (i.e., you owe more than it is worth), the Bankruptcy Court may allow a "cram down" of the mortgage.  In other words, in certain situations a Bankruptcy Court may extinguish that part of the mortgage that is greater than the value of the house, and "cram down" the principal amount owed to be no more than 80-90% of the value of the home.  You should consult with local Bankruptcy Counsel to verify this, and see if a cram down option might work for you.  If you are eligible for a cram down and can afford the newly reduced mortgage payments, it would make sense for you to keep the home and then sell it once your Bankruptcy is over, thereby recovering your costs. Please note, however, that even if you proceed with a short sale and it is approved by the Bank, the short sale must also be approved by the Bankruptcy Court in order for a valid title transfer to occur.  Again, you should consult with local Bankruptcy Counsel to determine which option best suits your situation.  Bankruptcy Laws are constantly changing, and the Rules are very state specific. -Jennifer Polovetsky, Esq.Law Offices of Jennifer Polovetsky, Esq., PLLCFull Service NYC Metro Area Law Firm Practice Areas: Real Estate Law and Litigationwww.jprealestatelaw.com

The bottom line is a deed in lieu would be great but I am assuming you are behind on your loan, which could make this tough.  Contact the bank directly and submit the application for a short sale, with the hardship letter etc. There's no guarantee the deal will be approved BUT whatever you do, make sure any deficiency judgment is waived.