Credit Debt/Student Loans

Hi,

My fiance and I are trying to get ourselves out of debt and work on finding a solution to our huge credit problems.

I have decided that bankruptcy is really the best route to go for myself. I am 29 years old on permanent social security disability and I have over 20,000 in credit card debt that I used to pay medical bills etc. I am considering doing bankruptcy myself rather than paying a lawyer but I am told that is not an easy task.

My fiance is 30 years old, has lower end of "fair credit" has a ton of revolving credit debt:
hsbc - 900 credit limit 850 owed
hsbc best buy card - credit limit 2000 1800 owed
juniper bank 1000 credit limit 840 owed
capital one 1200 credit limit - 1151 owed
usaa mastercard 1500 credit limit - 1460 owed
first premier bank card 350 credit limit -400 owed (over the limit in collections)
target card 200 limit - 45.00 owed
jcpenny card 1800 credit limit 1780 owed (credit limit was 3000 but lowered to 1800 on 7/25/12 after GE reviewed credit score)
AAFES Star Card (military credit card) 5000 credit limit 3500 owed

He also has student loans in the amount of 65,000 (ba and ma programs) but they are currently on an unemployment defferement.

He is unsure what to do. we cannot continue the min payments on these accounts any longer. they are all in current standing paid on time (with the exception of first premier bank) but we have only been paying the min amount due.

He just graduated from the police academy five months ago and has proactively been searching for a job with different agencies. he was honorably discharged from the army in jan 2009 when he came back from iraq (his contract was up after serving nearly 9 years). he then finished his ba and ma degrees and started the academy and graduated. during that time he exhausted all 99 weeks of his unemployment, to continue making payments on these accounts and also for living costs and food costs. once unemployment was over we exhausted all of our combined savings (nearly 20,000) for living expenses and min payments on these credit cards.

since he is not currently in default with the exception of one card should he default and attempt for a settlment or consolidation program? do you have to default to enter into one of those programs? we are looking to approach this in a proactive manner because the background investigation is going to inquire about his high credit balances and we need to figure something out to show that he is responsibly trying to fix his credit. should we continue making only the min payments (this would require selling personal belongings) or should we look into one of these programs for him? any tips, suggestions, ideas would be greatly appreciated.

also he has no property no, assets, etc. and currently we have less than 1500 in our joint checking. i have resorted to selling personal items on ebay to help make the min payments.