Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Your goal is to hope and push for the passage of HR 1106, which is currently stalled in the Senate Banking Committee. This bill would permit a bankrutpcy judge to force lenders to accept lower principal balances on their loans as part of a Chapter 13 bankruptcy. And, since you apparently have income, and you want to save your home, you would need Chapter 13 rather than Chapter 7, plus this new law to save your home.
There really is no other option (although there are loads of businesses pushing other options).
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The object of Ch. 13 is to spread your payments out so you don't lose any assets, and force any unsecured creditos to accept no more than they would receive were you to file Ch. 7 (total liquidation). Generally, retirement accounts are exempt from creditors, so you would keep that money. As far as future income goes, you have between 3-5 years to pay off the Ch. 13 plan, and if you succeed, then you are discharged from whatever debts remain, and you go forward from there.
If you can't make the payments, then you will either be dismissed from Ch. 13, because your actions were in bad faith, or converted to a Ch. 7 (or discharged directly from Ch. 13), which would liquidate all of your non-exempt assets.
For a discussion of the Ch. 13 rules you may want to pick up a copy of one or more of these publications: http://search.nolo.com/query.html?qt=bankruptcy&col=b2store.