Looking for advice on how to relocate

I'm a frequent poster but not comfortable with sharing my personal info openly. I'm a fellow New Yorker who moved OOS a few years ago, I got married and now have 2 small children. It was always our intenion to move back east or somewhere other then the town we currently reside in. The issue we have is the current real estate market leaves us with approx only 25-30K in equity BUT, our development was recently involved in a construction litigation in where we settled. Our settlement will not even cover the cost to repaint out home, let alone complete the repairs and if and when we do sell we have to disclose the litigation and show proof that the repairs were completed or reduce the sale of the house and sell as is. The cost for the repairs is approx $15-20K. I feel sick to my stomach and stuck here now. I seriously don't know what to do or where to turn. My husband is concerned too but he leaves me to handle everything so I feel that this problem is mine to solve and I feel pressure to resolve it before my oldest who is 2.5 is off to elementary school.

We have some college loan debtand cc debt and we consolidated everything to one low interest payment. We also have 2 car payments, plus day care, mortgage and utilities. We dont make enough to set aside any funds for a move. All of our funds are already allocated.

I just dont know what to do and I was wondering if anyone else has been in this situation and if they care to share some advice. I think I would be willing to walk away from my home but my husband is not. Should we just rent out our home and rent a home in a town we want to live in or move to? UGH! I feel like Im letting my kids down because this area is not the greatest, the school system is not the best and we are far from everything. In order to be social and do things, we have to travel almost an hour each way.

I appreciate it if you made it this far. And TIA for any advice and suggesstions.

Re: Looking for advice on how to relocate

Not totally the same but we were affected by Sandy.

Our SD is also not one of the best on the island.

We've pretty much accepted our situation though as it is what it is. And honestly, when we did buy our home, it was what we could afford and we didn't go into it thinking that the house would be a quick flip.

We're planning to obviously stay and do renos soon to make the home nicer.

I just received a notice today from the insurance company that they are dropping us for being in a "catastrophe zone" so that too is icing on the cake.

Sometimes I get down if I think about "being stuck", but I also am trying to keep an open mind.

This could truly be a once in a lifetime storm.

I also often follow the RE threads on here with local agents when they talk about people purchasing in Sandy-damaged areas and it does not necessarily sound like we are doomed.

Maybe this year, but as time goes by, maybe not.

But like I said too, we are here for the long haul.