I sympathize with your situation greatly and think you have come to the right place. I will tell you from personal experience that my time here on myFico has saved my credit and perhaps my future. In the time I have been active here, about 15 months, my score has improved from 510 to now almost 700.
I'm not a real financial guru so my advice here may be a bit more limited than some other users, but I hope to just provide some hope.
Like you I was embarassed to admit my 510 score, but with time I felt that the best way to overcome a problem is first realizing it.. I always think of this quote when I need a little motivation: "Not 'till we are lost do we begin to find ourselves."
In 2010 my father went through a severe sudden medical emergency and our family was struggling as we had lost my father's income unexpectedly. I saw my mother trying to pay for a large mortgage, credit cards, utilities, food, a car payment and insurance, and all of the expenses that come with life, all in the blink of an eye.
I put my finances aside to help her and in exchange suffered 57-- yes FIFTY SEVEN-- delinquencies on my credit file, and I sadly have screenshots to prove it! They included everything from 30-day lates to 120-day lates. My score dropped from the mid-to-high 700s to 510. It was abysmal and I felt like dying.. long story short, I found ways here on myFico to slowly trickle my score back up point by point.
I would highly suggest looking into "goodwill adjustments" here on the forums. They have helped me greatly and due to them, I have had many many lates removed from my credit report thus far, and am still going. Lenders and creditors can often sympathize with certain situations so it's worth a shot. If you get turned down for any adjustments, KEEP TRYING. Some of my goodwill adjustments came on the 4th, 5th or 6th try.
As for bankruptcy, I hate to see that happen for only $10K in debt especially if you are getting a lump sum of cash in the near future to pay it off. I would personally suggest doing what you can for the next few months trying to avoid having your car reposessed, then pay off whatever you can strategically. Look into "PFD" (pay for delete) here on the forums as well. Some creditors will agree to remove negative reporting if you pay what is owed-- however always get this agreement in writing before paying. Plenty of info here on the forums. If you are seriously considering BK, I'd advise you to speak with a BK attorney (even a free consultation) to see the long-term effects, like perhaps not being able to cosign a student loan, etc.
In the immediate short-term, have you inquired about having *any* of your accounts put into some sort of deferment or grace period until you receive your lump sum?
I type too much and ramble, but just keep pressing on. Your score will improve over time and don't ever feel lost. Keep reading on these forums and do your best and it will begin to work out.
