I'm in the same situation...I filed chapter 7 almost 3 years ago and did not reaffirm my mortgage. I'm 2 months behind now and letters from mortgage company state that "you have been discharged from personal liability for this mortgage loan as a result of a Chapter 7 bankruptcy proceeding". It also states that the mortgage remains as a valid lien against the property and will be foreclosed if amounts due are not made, and that in the event of foreclosure, I would not be personally liable for any part of the debt, but would lose interest in and rights to the property.

I'm a single parent and my child's father has been laid off a few times in the last year...when I don't receive the child support it's impossible for me to stay current on everything and it's too stressful trying to keep the house; I want to walk away and just rent for a few years but am worried about whether or not a foreclosure will show on my credit reports?? They did start foreclosure proceedings last year, even setting a sale date. I brought my payments current and they did not foreclose. It did show up in the paper but has never shown up on my credit reports...not sure if that's because the sale never went through?