I feel like I'm typing this over and over again... 
You're not bankrupt.
You have $13K in debt, which is a settled $4K in debt. You hit a rough patch and didn't have a plan/emergency fund to get you through, but it's not the end of the world. With everything current, you're actually in GREAT shape, even though it might not look that way.
Look at it another way: Let's say you file BK on your $13K. In 6 mo, you lose your job/insurance and have a heart attack. Now, you have $500K in medical bills that you can't discharge and no one will hire you because of the debt you currently have and/or the BK on your record. Do you really want to go through all that for a settled $4K worth of debt? (Note: If you can PIF w/o settling, that is a MUCH better option despite the fact that it may take 1-2 years. When you're done you'll have a 720-740 credit score and no BK)
What you need to do is go buy the book "Total Money Makeover" by Dave Ramsey. It's like $20 or you can go borrow it from the library. Read it twice then start living it... When bankruptcy can be avoided, Dave's plan is phenomenal. You might want to take a 2nd simple job to kick your debt-freedom into overdrive. If you need more help avoiding the BK, feel free to ask! We're here to help!
By the way: Of course the attorney tod you that BK is a good option: S/he doen't get paid unless you hire them. Think about that for 2 seconds and it becomes really easy to disregard that garbage opinion.
Cheers and good luck!
-SM
P.S. Don't file BK. 
Starting Score: ~470 preBK(8/2010)
I agree with SoulMaster....you are not bankrupt just overwhelmed with debt. I would start by targeting the lowest balances and paying them off first. You'll feel better and with the zero balances you can add their pyt to the next highest cc. Paying the highest first is usually the way to go but in your case, I think peace of mind is important too.
I've bee where you are and I jumped the gun and filed a 13 in 05. I ended up dismissing the case 6 mos later. Because it was dismissed and not discharged its on EQ for 10 yrs If I had actually thought it through, I wouldn't never filed.
I've bee where you are and I jumped the gun and filed a 13 in 05. I ended up dismissing the case 6 mos later. Because it was dismissed and not discharged its on EQ for 10 yrs If I had actually thought it through, I wouldn't never filed.
There are jobs you can do from home even w/ your 10 mo old. Call Center operator comes to mind.
This article is from like 3 weeks ago: http://www.huffingtonpost.com/2013/06/27/jobs-you-can-do-from-home_n_3505353.html
By the way, if you're expecting a large tax return, you're making one of the classic blunders of ALL time: "Never get a refund of more than $100." (Right behind: "Never get involved in a land war in Asia" and "Never go in against a Sicilian when death is on the line").
Let's say you're going to get $2400 back from uncle Sam. You can adjust your witholdings (by filing a new W-4) and add an instant $200/mo to your budget. So, bingo: we just solved your budget problems. Go fix those witholdings, ASAP! Proper witholdings will mean you owe or get back <$500 every year. Anything else, you're literally wasting money.
-SM
P.S. Go buy that book anyway.
@Elexismc wrote:I'll definitely go look for the book....I think I'll go talk to the lawyer(since it's a free consultation) but I am strongly considering going with my original plan(and your suggestions) to just try to grind it out for the next year and try to take care of it myself. It seems impossible right now, but like you both said-it's a WAY better option than dinging my credit for ten years. Just so overwhelmed with everything at the moment I suppose. I have two dependents which is why I tend to get a decent return back(child tax credit). I guess I just need to start hammering away at these balances little by little and try not to lose my mind lol...I REALLY appreciate you both taking the time to respond to me and give me advice...it was helpful to hear(or read) someone else telling me what I knew to be true-just didn't seem feasible at the moment.
This, and mortgage interest should be accounted for when you fill out your W2 (It's just that nobody tells the middle class this, and they tend not to hire really-good accountants, who will tell you this in 10 seconds). For example, a single guy who pays $40K in mortgage interest/year might be claiming 15 deductions, this is perfectly legal (and expected)
You're making a serious mistake if you're getting back money at the end of the year. Up your deductions so your estimated tax paid:liabilty balances as close to zero as you can get it. (Getting any kind of refund at all means you gave the IRS a tax-free loan).
Don't take my word for it: http://www.irs.gov/Individuals/IRS-Withholding-Calculator
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If you are an employee, the Withholding Calculator can help you determine whether you need to give your employer a new Form W-4, Employee's Withholding Allowance Certificate to avoid having too much or too little Federal income tax withheld from your pay.
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Emphasis on "too much" is mine. You'll see that calculator actually accounts for the Child Credits to figure out your proper withholding. The crappy one they include on the W-4 is designed to get people to over pay.
-SM
@Elexismc wrote:I will definitely look into the settling...but-it would be WAY better to just pay them(as long as it's possible) since I am current on everything right now, correct?
Fix your taxes... then pay them in-full using the Snowball method (it's in the book).
-SM