A short sale is an alternative to foreclosure or bankruptcy proceedings.

A short sale describes when a lender accepts less than the amount due on a loan. You should speak with an experienced attorney prior to the short sale and call an accountant to learn of the short sale's technicalities.

Based on the Mortgage Forgiveness Debt Relief Act of 2007, the IRS will look at any form of debt forgiveness as income.

If a short sale occurs, there is not a guarantee that the lender will not go after you for the difference between the amount your home is sold for and the amount owed to the lender.

To start a short sale, you must call the lender several times to get a hold of the person that handles short sales at the bank.

Persistence is king and courtesy is queen. When you combine persistence and courtesy, you have a kingdom of financial restoration for your family. Your objective is to speak with the head of the department and not just someone in the loss mitigation department.

You will be required to document your financial situation in writing.

Further, you should send a letter of authorization that allows your lender to communicate with various real estate professionals about your situation. The reason being that your lender will be required to speak to real estate agents, attorneys, title companies, and more to make your short sale a reality.

You want to communicate to the lender in the most expressive terms possible to show how you got into a financial predicament.

You must convince the lender that you cannot repay the loan. The best evidence is written documentation, such as receipts, bank statements, and/or income tax returns.