I do not want to sound judgemental, I've made financial mistakes myself in my own life.

The recurring problem I see here, and in this country in general, is that borrowing money and running up credit card debt is perceived as the "easy solution", when it's no solution at all.

Borrowing ever more money, and shifting from one form of debt to another is "easy". Living within your means, and even *below* your means, and reducing debt, is HARD. So we stress out, rationalize, and try to find ways to avoid doing the HARD things.

The OP needs to take advantage of reputable financial couselors, lay out every detail of their finances, and simply ask the counselor "where do we go from here". They will receive much better advise than we can give here.

It will be HARD. The OP may even have to live in a house that they don't want to live in until they find a way to sell without incurring financial ruin. They're current on all their bills now, and the mortgage is fixed. They just need to cut back so it doesn't take their last dollar at the end of the month to pay the mortgage. And PLEASE talk to a counselor about the insanity of taking on even more debt to "carry you over".

It has already been stated that the market value of the house at any given time is irrelevent, and that is true as long as you don't *have* to sell due to a relocation, job loss, or some *real* reason. No homeowner who has been able to keep their mortgage current should be selling, in panic mode, just because values are declining. As one poster pointed out, that is a "cut and run" strategy and is not called for here. As long as I am financially able to make my mortgage payment, I breath easy knowing I have a roof over my head and my credit rating is still intact. The OP needs to do the same.

And I have to jump into the pool over that $1300 spent on Christmas gifts also. It was short-sighted at best, and serves as an indicator of how easy it is for you to rationalize the way you manage your money (poorly). You rationalize it because you sold existing goods to come up with the money, instead of charging it. The source makes no difference; it should have gone to reduce your debt. It should have gone to the loan balance with the highest interest rate, regardless of the fact that you're "current" on all of your debt. I think the posters jumped on this tidbit not because of any nastiness, but because it demonstrates the OP's thinking about money.

One last point: we as a nation of consumers need to be acutely aware of the difference between *investing* money, and *spending" it. But that's another post.