Lessor Evil or other options???

[Joel Fraser]

Hello all and I hope you can provide us with some guidance Our Story.....My GF and I met,dated and now plan to marry. She moved to my place and we placed her home up for sale or rent by owner. Needless to say that hasnt worked out with no one interested. We listed with a Realtor whom she had worked with before. We set the selling price to cover the mortgage, with the idea we would cover the realtor fees. Now the realtor is telling us that in order to attrack a buyer in our market we need to lower the price 10-15k making our loss in the range of 20k... We cannot do that period. We are not behind on her payments but it is a real hardship to keep making these double mortages. We feel we have given it a fair shot to move the house. And are reviewing our options. The details: She has a Bankruptcy from 8 yrs ago and her credit score is 680, I belive the bankruptcy is off her report. 12k in CC debt 25k in student loans, 30k in a auto loan,which I cosigned. She has no cash reserves as she is a single mother with a bipolar child. State Retirement when eligible in 13 yrs The home mortgage is upside down 15-20 k with no late or missed payments..She has been paying PMI does that help us? The realtor has recommended a short sale.... saying 75% of our market is a short sale. So far we have not contacted the Mortagage Co. Well-Fargo So our questions, what harm to her credit or others will result of the following actions: 1) Short sale...do you make payments while awaiting the potential buyers, what happens to her credit history. 2) Walk away.(foreclosure).. mail hardship letter to mortagage co.... 3) Deed in Leiu.. Dont know what this really is but what effect does it have on our future... 4) Bankruptcy... This is a hard one for her because she really didnt cause the first one (EXhusband ran out) She really cried when we discussed this option... Would filing Bankruptcy clear her slate and allow her to start over rebuilding her credit/self-esteem. 5) other options we are all ears. I am looking at what the total effect these procedings will have for her, I have been told that her "issues" will not effect my credit or status after we are married but I am worried about possible long term harm to her credit score. Which would be the least "painful" in regards to time to recover I am really glad this forum is in exsistance to share ideas and hope for all of us caught up in this market. THanks, OhioBucks... In Ohio