Advice needed, please

[Dizzy]

Good morning. First of all, I want to apologize for making this so long! I'd like to know, from others who are or have filed Ch 13, whether you all would file a 7 or a 13 in my situation. We are now 3 months behind on the mortgage, 2 months behind on a loan payment of which we used a 1998 Lexus as collateral, 2 months behind on a two year furniture payment of which we still owe 1 years worth of payments, and have about 8K in credit card debt. We need the car and the house. Our loan (car secured the loan) payment alone is 310.00 a month. If we file a Ch 7 all the unsecured debts go away but we have to come current on the mortgage and the loan, right? That would take about 4K that we just don't have. The lawyer we consulted with has estimated our 13 payment would be a little more than the loan payment is now and would include everything past due on a five year plan. On the other hand, thinking we could handle ANY monthly payments on top of our normal monthly living expenses is what got us into this in the first place. We are living in a very repressed area and my husband is supporting a family of four plus our pets on less than 25K a year and that is working two full time jobs ( I can't find a job and unless we have this vehicle which secured the loan I can forget about ever having one- he works in the medical field and that's only kind of employment there is in this awful place and he luckily works at both of our local hospitals). We really don't want to jump from the frying pan into the fire by commiting to a payment we aren't sure we can afford, but the car was left to me by my Dad, it's dependable and has less than 90K miles on it and we also don't think we could find a place to rent if we lost the house to foreclosure. Needless to say, real estate isn't moving here so the house wouldn't sell even if we listed it.
Like the Wicked Witch of the West said, "What to do? What to do?"

[falken]

Can you afford the house if the loan secured by the car was gone?

If so, I am thinking a chapter 7, become current on that loan by stopping paying on the other loan and other unsecureds and try to save up to purchase a cheap car (I know, that's all a tall order).

The other option is to walk away from the house and the car on a chaper 7, start over and find someplace to rent that you can afford and a cheaper car.

I am hesitant to suggest a chapter 13 since you said you don't think you could make the payments. You don't want your 13 to fail because you can't make the payments on it and/or the secured property you keep.

[Dizzy]

I know! I think I keep over analyzing. I admit that it's hard to overcome this defeatist attitude I seem to have lately. Our credit is already so bad that even if we could find a house to rent, nobody would rent to us, plus we have these pets that I just can't give up. They're old and have been with us for over 10 years. Also, I envision buying a clunker that breaks down right after we buy it and not having to money to keep it running and then not being able to get the kids to school and husband to work. I'm leaning towards a 7 too but therein lies another problem. The other attractive thing about a 13 is that we only need $100 to get that started and the fees are included in the BR whereas in a 7 I will need to come up with $1000.00.

[optimistic1]

Don't be surprised that you could actually rent with very bad credit. The rental market is hurting right now, and they are starting to realize that many people now have bad credit due to the economy. They can make exceptions to the normal "old" rules.