Filing for Bk facing possible foreclosure

[stephslr]

Every single month for the past 6 months, we are $500-800 short on bills. The property tax bill and medical bills have just not been paid in that time, and we now face a $5000 tax bill at the end of the year and a $1000 medical bill that has started to go through collections. We had also gotten behind on student loan payments, and are working to catch those up.

After months of begging, we have finally been given a prequal for a loan mod. But, we were told to wait at least 45 days to hear anything. We are current on our house payment, just pay late each month and pay the $100 late fee. The bank has made an extra $1000 off us in the past 12 months due to the fee.

We have consolidated our credit cards, gotten reduced payments on the student loans, down graded cable/internet, and try to use little A/C although it is hot in Texas. Between my husband I we work 120 hours a week, have one day a week where we can 5-6 hours together with our 3 year old. We are 30 years old, and do not see an end in sight to how we are living for at least 6-7 years if we stay on this path. If one of us were to lose a job or get even a few reduced hours a week, we would be completely under. We owe has just one 30 year fixed mortgage with 222K on our house that we could maybe sell for 180K on a good day, owe $5000 in back property taxes in December, as well as $500 for HOA.

Our bank has refused to offer us any assistance at all until the prequal for the loan mod next week. They will not let us do a short sale unless we have had the house on the market for 90 days, and will expect the offer to come in around 85-90% of the loan total (which is virtually impossible). We can't afford to pay anything extra in terms of deficiency payments or extra fees on a foreclosure or short sale.

With credit already pretty much ruined and no money to our names, we feel that BK is the best option. We are going to just have to not make a payment this month for the first time and do not think we can make the payment next month as well (we won't even get the loan mod offer paperwork) before the 2 months would be missed. By missing the payments, we can get the utilities paid this month and have a little cash left to pay a BK attorney and move to an apartment.

We feel that the BK would allow us to let go of the house and not have to pay taxes, fees, or penalties from the foreclosure (bank won't let us do deed in lieu), stop paying the $450 a month in credit cards (only reason why we have them was because of the house payment being more than we could afford when my husband lost his job for about 5 months), and actually be able to work closer to 80-100 hours a week between the two of us. Are these statements true?

Or, if we let the house go into foreclosure, in the state of Texas, what would we be responsible for paying as a result? We literally have no money (owe much more than we make or can pay for) to pay any fees at the end as well as cannot pay the property taxes and HOA fees that we are behind on. Does it seem that BK would be in our best interest? We feel that we would qualify for Ch 7 even though we make slightly higher than the mean state value since we do so by working so many hours, and I believe we pass the means test/insolvency. What to do???