Just because there are additional liens on the property does not mean that a short sale is out of the question. Judgments can be negotiated, and also many times there might be a defense to them. I would suggest contacting an attorney who handles short sales as well as bankruptcy. That way, you can get a wider opinion of the available options. A good attorney can most likely find a solution that will put you in a better position than you are in now. Doing nothing is not an option. Good luck!