[jordantm]

filing for bankruptcy. What are the pros and cons for EACH?

[SID]

Bankruptsy and forclosure are being done by alot of people , so you wont be the minority hopefully the housing bill will help you ~ talk to an atty try to save the house but claim bankruptsy , there are alot of other options also ... good luck

[Brother Otter]

There really aren't any pros for either one. Sorry.
Yeah, with bankruptcy you get away from most of your current consumer debt and you get to keep the house. But bankruptcy is forever and it's gotten a lot harder to file for. Even though it falls off your credit record after seven years, forever after if a credit application asks "Have you filed for bankruptcy?" you have to answer "Yes".
With foreclosure, you lose every penny of the principle you've paid AND you get a big black mark on your credit that makes it really darned difficult to buy another house.

There are alternatives...
Selling the house for just enough to pay off the bank (if you haven't been stuck with one of those insane sub-prime loans) at least preserves some creditworthiness.
Refinancing or negotiating an interest only payment for long enough to get other finances under control may work.
Dave Ramsey has lots of good stuff to say about getting out of a financial hole. Find one of his "Financial Peace University" courses.