We filed Ch. 7 Bankruptcy one year ago. We included all debt including our home (first, second, and lien for windows) and did NOT reafirm. We thought we wanted to stay in the home so we continued to pay the mortgage. Our home value dropped so much that we will not get that back anytime soon and have decided that we need to let the house go. We are unsure if we should just stop making the payments and allow it to foreclose or if we should short sale. Although we could walk away clean without having to pay anything in going the foreclosure route we are concerned on the credit implications on having a foreclosure after bankruptcy. We are also concerned that if we go the short sale route that we may sign something without understanding that may get rid of our bankruptcy protection and make us have to pay the deficiency on one or more of the loans (which we don't want). Any advice would be greatly appreciated. Questions:
1. What is better on credit after bankruptcy: short sale or foreclosure
2. Is there anything we should be aware of if we in fact do choose to short sale since we did file bankruptcy a year ago? Could we be asking for trouble with this?