Advice on surrendering a car.?

My boyfriend has a 2007 Toyota corolla and pays about $400.00 a month for his car. I lost my job over a year ago and he now also pays $330.00 a month for my car. We have had a lot of un-for-seen things come up such a becoming young parents and the foreclosure on my parents home in which we were also living. We live in pa. We are finding ourselves behind by on both car payments every month. My boyfriend tried to find cheaper insurance on his car. He eventually got liability on a car still being financed. He thought it was legal and if he got into an accident he would be covered by his "platinum" coverage as well as gap. Just a week ago he got into an auto accident in which he was found at fault. His car has $5,000 dollars in body damage not including the engine and interior damage. The insurance company will not total out the car because the airbags did not deploy. We recently found out his cars gap coverage is out because of the liability coverage. He had to have full coverage to keep the gap active. The finance company never called to check with the insurance company to make shut the finacee's (my boyfriend's)car was properly insured. Now we are stuck with a huge bill for towing, storage fees, the monthly payment, and fixing the car. We live paycheck to paycheck. I am still unemployed. I see no option for us then to surrender this car. Should we seek out an attorney? Should he file for bankruptcy? His credit was bad before this happened as-well. His cousin is a co-signer on his finance agreement. What are our options any advice would be greatly appreciated. Thank-You!