What happens when you do a short sale on a house?

Lets say I owe $358. Lets say the bank accepts a short sale of $300. What happens with the remainder of the $58,000? I know I get taxed on it, but I am not responsible to pay that right?

Also, what happens to the equity line that is with it if it is not paid? Do they come after you for what you owe on that?

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