Every situation is different, so the best first step is to gather information. Ask your lender for a payoff statement and whether a short sale review is available. Ask your attorney about deficiency exposure, tax consequences, and whether bankruptcy changes the picture.
A short sale often offers more control over timing and a more orderly move. It also requires paperwork and patience while the lender reviews the file. Free HUD approved housing counselors can help you organize the process.
General information, not legal advice.