Julie and Ralph have a small mortgage on their home. They have $$30000$ in equity in the house. Concerned about keeping the equity in their home, Julie and Ralph transferred ownership of the house to her sister. They also have student loans and almost $$10,000$ of credit card debt. Ralph lost his full$-$time job $6$ months ago and is not eligible for unemployment. Julie works part$-$time but can't cover all the bills. They have been talking about their options including bankruptcy for the past $4$ months.

The credit cards were used to take a nice vacation a month ago $($$$2000)$ and buy tools $($$$8000)$ that Ralph will use to start their own business sometime in the future. The tools are stored in their garage. They are still paying on their car loan but are $2$ months behind on that too.

What options do they have regarding bankruptcy?

How do secured transactions factor into this scenario, if at all?

What is likely to happen if they file bankruptcy?