After both, foreclosure or a short sale, the shorted lender(s) may proceed through the court system to recover the amount lost during the transaction from the borrowers. When someone goes through a foreclosure, there is no opportunity to discuss with the lenders what will happen to the deficiency amount and it is very likely that the lenders will pursue the deficiencies especially against those individuals who pursue strategic default rather than a short sale.
The lender can attain a judgment and go after a borrower by placing liens on property and garnishing bank accounts and wages. Needless to say that it is not something that anyone wants.
By electing to go through short sale process rather than simply walking away from the home, the borrower has an opportunity to control and negotiate the actual deficiency. Furthermore, the actual shortage is always lower in a short sale due to the fact that the property is sold with the assistance of a short sale realtor and for market value rather than significantly below as in the case of foreclosed home.
When evaluating your options, you need to have guidance from an experienced short sale professional..