I definitely would NOT trust most of the debt relief agencies you hear advertise 24/7. The way I understand it, they have you stop paying all of your unsecured debt and send the money to the agency. Then, over a period of 3-7 years, they slowly settle the debt with the "bank" you have built up with them. During this time your credit continues to tank. In my opinion, this greatly prolongs out the time your credit score suffers.
My strong suggestion is to speak to a bankruptcy attorney and get some real answers to your specific financial problems. I am a tax and bankruptcy attorney and, based on my experience, filing for BKY is often times the best route to go depending on your debt load. If you qualify for a Chapter 7, you would be able to discharge all or substaintially all of your unsecured debt in about 90 days (studnet loans, most taxes and child support is generally non-dischargable, along with some other types of debt). Your credit will take a hit, but most of my clients have reported credit scores in the high 600s and low to mid 700 with in year of filing, some even sooner. That is done with some effort on their part, but a good attorney will give you some direction as to how to rebuild your score. Keep in mind that a Chapter 7 does stay on your credit report for 10 years, however, it does not mean you will have a low FICO score for that period.
I do understand that there are some moral implications to a decision like this and that is something you and your husband will have to work through. I also anticipate some dissent on this site as well. Keep in mind that this is your personal decision. Again, based on my experiece, being released from a crushing debt load can be the best thing for a struggling family.
If you would like to talk to me about this, my contact information is below:
Grannis & Hauge, P.A.
1260 Yankee Doodle Road
Eagan, MN 55121
If you don't contact me, call another attorney who is willing to give you some answers and some guidance, whether or not it is BKY.
P.S. Cancellation of debt is not taxable if done in a bankruptcy or when the taxpayer was insolvent, meaning your liabilities exceed your assets at the time of cancellation.