Never accept a payment plan from the bank – Let’s say you owe $250,000 on your home, you bought it for $278,000 and it is now worth $150,000. A $100,000 difference in what you owe the bank and what the home is worth. A buyer contracts on your home for $150,000 and the bank agrees to the short sale, agrees to waive the deficiency but comes to you and asks for you to come to closing with $5000 or take a unsecured note for $10,000 at 0% interest payable over 15 years at $56 a month. You say no and the home ends up in foreclosure, is resold after being carried by the bank for a year from the foreclosure date to resale. In the interim the home deteriorates slightly from nobody living in it and causes the value to go down by 15% and the sales price is $127,500. The bank incurred taxes of $2800, attorney’s fees of $12,000, Realtor commissions of $7,600, carrying costs of $3300 for utilities for the year and $3500 in miscellaneous expenses. The $100,000 difference in the short sale price to what was owed is now $151,700 that the bank may seek a judgment against you for that amount. This is a big difference between possible out of pocket costs and not to mention how your credit will be affected. Keep in mind if you foreclose and a judgment is sought, your wages may be garnished.