It's worth consulting a bankruptcy attorney about--the answer depends on how much of your assets you can protect with the state law exemptions, and how much of your debt is dischargeable in bankruptcy. Yours sounds like a good case from the limited facts you've given, so I'd recommend having a consultation with a bankruptcy attorney (or few) to see what your financial picture would look like after a bankruptcy. If bankruptcy isn't a good option, you do have the ability to try negotiating the debts through an attorney or debt relief agency.

Whether you would qualify for bankruptcy depends upon a thorough review of your entire financial picture.

Whether you are behind in payments or not may not be relevant as to whether you qualify. What is more important are your income and expenses, your six month average income, the size of your household. I assume that you are aware that there are two types of bankruptcy which are usual for the average consumer, Chapter 7 and Chapter 13. Chapter 7 bankruptcies eliminate (discharge) most debts. In a Chapter 13, you would have to commit to a three- or five-year plan to pay off at least a portion of your debts depending on a calculation of discretionary funds.

Many people face similar circumstances and have gone through bankruptcy. I am skeptical of the effectiveness and ethics of some of the companies that offer debt relief.

It sounds like the only thing that would prevent you from doing a Chapter 7 (where you're discharged of all your debts and you get to start over) is the equity in your home. You said you've owned it for 4 years, but you didn't say if you owe any money on it. If your equity is less than your homestead exemption of $150,000, then you're probably OK to do Chapter 7, assuming your income (other than social security) is under $5,000/mo.