I own a home and 1rental propertery. 2 credit cards--one which I payoff each month and the other with a balnace of 12k. However, I bought lake house 2 years ago hoping to flip it within a few months. Then the market fell out and still have that one property which I can't afford. I am OK paying my home, credit cards and the renatl pays for itself. What do I do with the lake property? As of right now my credit is picture perfect but it has come to the point where I can't pay for the lake property. What do I do?

Well with a foreclosure or short sale, the lender can still come after you and your assets for any shortage between what they get and what you signed for in most cases. You have to be careful how its executed.

This can be a delicate case... Perhaps worth paying an accountant that can come to your place... see your income.. expenses, see what can be trimmed and where from an objective perspective. It might be a rough few years... IF the numbers will work. But don't jump into anything without carefully weighing all the options and knowing the downsides to all of them.