My family was overrun in medical debt (despite having insurance) and we considered a short sale just to get out so we didn't foreclose. We figured it would be better in the long run to walk away with good credit and a chance to own again in the future than to have the black mark of a foreclosure on our record.
Thankfully, we were able to hang on. Took us years to pay off that debt, but we did - to the last penny, and kept our house and exceptional credit rating intact.
Sacrifice, sacrifice, sacrifice...worth it in the end.
You don’t walk away with good credit with a short sale, but you may be able to rebuild it sooner. Consult lenders. They will tell you what they are accepting in new applications from those who were foreclosed or did a short sale.
You did good.
I've never experienced the problem, but Dave Ramsey says a short sale will also ding your credit, just not quite as much as foreclosure.
A short sale is a foreclosure in the eyes of creditors