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Hypothetical Equity Line / Short Sale Questions?

If someone is facing a short sale possible, but it still left 30k in a line of equity, would it be possible for that person to use the 30k to pay off student loans and other debts with the equity line if they know that already facing a short sale or foreclosure? Due to the cancellation of the Debt Relief Act Mortgage that has been adopted, a person would have to pay tax debt relief, so therefore used the extra money the line of equity would not be taxed. Would it be smart to pay off loans student with that money if I knew he would lose the house? Please no mean answers, I wonder if, hypothetically, be possible to use the $ $ without penalty.

I think the approach of selling the debt is also true and that other privileges (HELOC) are absent. The original owner would accept short selling, the owner of the second (HELOC) that want their money back.