Credit Card/Unsecured Debt nonpayment

My husband and I are facing a serious situation. First of all, we are in South Carolina, where garnishment of wages is not available to creditors.

Because of some bad decisions, medical problems, and loss of income, our debt finally got the best of us last Fall. We no longer have enough after our house payment, car payment, student loans, and living expenses to meet our unsecured debt payments. We have approximately $250 to apply to minimum payments that are roughly $1000. We were paying all the minimums totaling $1000 and then using the credit cards to meet our living expenses. That is until we hit the maxed out credit brick wall.

After meeting with a credit counselor from NFCC, who advise us to make sure our secured debt and our living expenses were met first and then concentrate on the unsecured. The budget she set up for us left us about $50 a month, but we shaved some more when we got home and came up with $250 a month to go towards unsecured debt.

I also talked to a bankruptcy lawyer who advised us to file for Chapter 7 to wipe out our debts for a clean slate. However, I didn't feel this was the best decision for us.

So, this is what I decided to do. I'm taking the $250 that is left over (and whatever else I can scrap_e up during the month) and paying one debt at a time. I'm on debt 1 of 7 right now and as soon as I get debt 1 paid off, I'll move to debt 2. In the meantime, debts 2-7 are not being paid. I figured this is the only way I can pay off my debts without filing for bankruptcy.

Debtors 2-7 are not very happy about this arraignment, of course. I have mentioned to them that the other option will not get them paid at all. Or, I could take the $250, split it 7 ways and never make a dent in what I owe.

As the next few years pass, I would hope that our income would be greater and that some our secured debt would be paid off. My truck is paid off in about 16 months.

I wanted to get opinions on this. What are your thoughts? Advice?

Again, we are in South Carolina. And, I guess it doesn't really matter at this point how we got to where we are; it's how we make it right.