You need to speak to an attorney for most of your answers. Logic would dictate that if you were not married, you are not responsible for your partner's debt unless you were also on the credit cards.
If the house was left to you, I assume it is transferring to your name. If you allow it to forclose, it will hurt your credit and you will not be able to purchase another home.
You certainly can try to have the loan mitigated, but keep your expectations low as to what loan mitigation means and how the lender defines mitigation.
Do not pay anyone to mitigate it for you; that is not necessary. You will have to provide a hardship letter to the lender, along with your financial information. Explain the situation and see what they can offer to you.
Please discuss everything with an attorney.... more