In my first- and second-hand observations of short sales, I have concluded they are messy, chaotic, and subject to arbitrary whims of bank negotiators, bank legal departments, buyers, and sellers. Senior executives at banks should be horrified at the inefficiency and waste in their short sale departments.
Rarely will short sales close quickly, and only the most optimistic person (or the insane) will estimate when a short sale will conclude.
It is impossible for me to read the minds of your buyer to determine the motivations of his or her actions. If they are dragging their feet with an expectation that they will be able to swoop in and buy the property in a foreclosure for a song, that is certainly a possibility. However, they are under contract now. If they allow the contract to lapse and still want the house, they will face competition from other potential buyers if the house is auctioned or sold REO. If you can prove this malevolent intent, they have given you a cause of action to sue for breach of contract. Therefore, it is certainly possible for the buyer to be dragging their feet deliberately, but their strategy is fraught with peril if they love your house.
Regarding bankruptcy, assuming you qualify, you can file Chapter 7 to remove the liability for the mortgage. However, short sale is a much more favorable outcome.
Regarding the promissory note, ask an attorney in your state to review your contract with the loan servicer. It would be folly for me to comment on a contract I have not read.
I hope this information helps you Find. Learn & Save.