Short sellers have increasingly resorted to bankruptcy to extend their stay in the property when a foreclosure (or even a closing date) is looming. It used to be that once a borrower in default filed for bankruptcy protection, the lienholder would quickly obtain permission from the bankruptcy court to continue the foreclosure process. Those days are long gone. Now, very often the lienholders do nothing after a bankruptcy has been filed, but instead simply wait it out until the debtor has received a discharge and the bankruptcy closes. There is simply no hurry for the lienholders to add to their portfolio of REO properties. Agents are now routinely facing a series of unique situations which in the past were rarely encountered. What happens when the seller in contract files for bankruptcy protection? Can real estate licensees sell the property as a short sale during the bankruptcy? Can the property be sold even after the bankruptcy concludes? This Legal Q&A addresses these issues.