what to do

I have 40k in unsecured debt a first mtg of 126k and a second mtg of 57k
My home value dropped from 230k down to 192k
I'm behind on both mortgages and most of my unsecured debt
I can bring both mortgages current if I use my 401k but will have to be terminated (from my currrent job)to access the money
When I start back to work I still will not be able to cover mortages and unsecured debt
so I plan to file bankruptcy since a non profit counceling agency told me I did not have enough
income to join their program
My main concern is to save my home
Any advice? or am I toast
Thanks in advance

I would avoid tapping into your 401k. In the end you could end up without a retirement or a home. My first suggestion is always to talk to a legitimate consumer credit counseling service to see if you would qualify for a debt management plan. If that won't work for your situation, then bankruptcy may be the answer. Bankruptcy isn't always the best option but in some cases, it's the only option left. You might even want to get a second opinion on that. I'm not sure which service you used but CCCS of Greater Atlanta is an excellent agency. Even though they are based in Atlanta they offer services to consumers all over the U.S. and their counselors are available 24/7 on the phones or online.

As far as your home goes, have you thought about looking to see if you qualify for the Making Home Affordable Program? You can find more of the details here: http://makinghomeaffordable.gov/