Most lenders won't approve a short sale if the homeowner is in bankruptcy… This is because negotiating a short sale payoff is considered a collection activity. Collection activities are prohibited in bankruptcy.
Often times the loan will show up as “paid” on your credit report. There will be a note note on the report that says something to the effect of “settled for less than originally owed” . This is better for you than having a foreclosure on your credit report.
Even if you accept an offer. You need to lender to approve the sale as they will be the ones accepting less than what is owed to them.