diff --git a/htlcswitch/mailbox.go b/htlcswitch/mailbox.go
index 99066497c..a729e3ba5 100644
--- a/htlcswitch/mailbox.go
+++ b/htlcswitch/mailbox.go
@@ -738,6 +738,7 @@ func (m *memoryMailBox) FailAdd(pkt *htlcPacket) {
 		sourceRef:      pkt.sourceRef,
 		hasSource:      true,
 		localFailure:   localFailure,
+		obfuscator:     pkt.obfuscator,
 		linkFailure:    linkError,
 		htlc: &lnwire.UpdateFailHTLC{
 			Reason: reason,
diff --git a/htlcswitch/switch.go b/htlcswitch/switch.go
index 70b819b1e..d473d8422 100644
--- a/htlcswitch/switch.go
+++ b/htlcswitch/switch.go
@@ -1297,6 +1297,11 @@ func (s *Switch) handlePacketForward(packet *htlcPacket) error {
 
 		fail, isFail := htlc.(*lnwire.UpdateFailHTLC)
 		if isFail && !packet.hasSource {
+			// HTLC resolutions and messages restored from disk
+			// don't have the obfuscator set from the original htlc
+			// add packet - set it here for use in blinded errors.
+			packet.obfuscator = circuit.ErrorEncrypter
+
 			switch {
 			// No message to encrypt, locally sourced payment.
 			case circuit.ErrorEncrypter == nil:
@@ -1485,6 +1490,7 @@ func (s *Switch) failAddPacket(packet *htlcPacket, failure *LinkError) error {
 		incomingTimeout: packet.incomingTimeout,
 		outgoingTimeout: packet.outgoingTimeout,
 		circuit:         packet.circuit,
+		obfuscator:      packet.obfuscator,
 		linkFailure:     failure,
 		htlc: &lnwire.UpdateFailHTLC{
 			Reason: reason,
@@ -1841,6 +1847,10 @@ out:
 			// resolution message on restart.
 			resolutionMsg.errChan <- nil
 
+			// Create a htlc packet for this resolution. We do
+			// not have some of the information that we'll need
+			// for blinded error handling here , so we'll rely on
+			// our forwarding logic to fill it in later.
 			pkt := &htlcPacket{
 				outgoingChanID: resolutionMsg.SourceChan,
 				outgoingHTLCID: resolutionMsg.HtlcIndex,
@@ -2065,6 +2075,8 @@ func (s *Switch) reforwardResolutions() error {
 
 		// The circuit is still open, so we can assume that the link or
 		// switch (if we are the source) hasn't cleaned it up yet.
+		// We rely on our forwarding logic to fill in details that
+		// are not currently available to us.
 		resPkt := &htlcPacket{
 			outgoingChanID: resMsg.SourceChan,
 			outgoingHTLCID: resMsg.HtlcIndex,
@@ -2214,7 +2226,8 @@ func (s *Switch) reforwardSettleFails(fwdPkgs []*channeldb.FwdPkg) {
 				// we can continue to propagate it. This
 				// failure originated from another node, so
 				// the linkFailure field is not set on this
-				// packet.
+				// packet. We rely on the link to fill in
+				// additional circuit information for us.
 				failPacket := &htlcPacket{
 					outgoingChanID: fwdPkg.Source,
 					outgoingHTLCID: pd.ParentIndex,