where do i go now???

I know there is no straight answers to my questions but please some guidance to the "mentally disabled"!
I moved (was transferred) to So California in the beginning of the last year. Unfortunately without any help from my employer. Hey! they transferred me to the Sunshine State so I should not complain. Since I knew of the transfer ahead of time I started shopping for a house in November of 2000 with a broker who just happened to be a "friend" of my wife's. Don't know how THEY talk me into it, but I bought a (fixer upper) house without a contingency on the sale of my old house (that used to be a fixer upper too). Upon arriving in California I filed a Homestead Declaration - prompted by one of the local lawyers. We where struggling for seven month paying two first mortgages and one second mortgage that I've taken out to put a down payment on the new house. Hence accumulated a sizable debt ~ 125k majority of which is credit cards,
We also bought two new cars last June because my wife's lease was expiring in October but with the move we piled up too many miles on it and would end up paying a penalty for over mileage, my car's lease expired last April. I know this all doesn't look "kosher" but that's where I am now and would prefer to avoid BK court or llosing my house if all possible. I've tried to take a second mortgage on my new house since I do have some equity ~ 70k, but majority of lenders are either refusing to lend due to low credit score (I managed so far not to miss on any of my payments) or offer 12% and up, which puts me right where I am now. Struggling to make payments!

My question is: If I end up finding a lower interest rate loan and pay off some of my high rate credit cards but still fail to "get out of debt" because my fixer upper still needs FIXING and my wife's employment does not look very promising. Is the fact that I've taken a second mortgage and fairly recently bought two new cars going to damage my case in court if end up filing for Ch13 or Ch7? Your suggestions are greatly appreciated!
Thank you.
Sorry for the lengthy wining.

[HomeGuru]

Sell both properties at below market value so they sell within 30 days.
Then rent.
In the meantime sell the new cars and buy used ones.

[vrzirn]

Both you and your wife need a lesson in "delayed gratification".

thank you