Foreclosure and HELOC

[M G]

Greeting!!!

I have a question regarding foreclosure or short sale. Any kind of advice is really appreciated. I bought my home back in 2006 here in Arizona when market was at peak. I bought it for 310K. I put down 5% and took 95% single loan from Chase. I was paying PMI then. After a while, I got HELOC offer from BoA for 52K. I took that money and paid down my Chase Mortgage inorder to get rid of PMI. After 4 yrs now, I have still 237K left in my Chase and 40K left in my BoA HELOC. The current value of my home is less than 160K. I still owe 277K (chase and boa). I am making 91K per annum so I can afford to make the payment but I have been hearing from friends to either let this house foreclosed or short sale it and buy another home for cheaper and affordable price either while my credit history is good or through my wife's name as her name is not on the title of loan/house. She has decent credit history and she is making 67K per annum.

My questions are, if I let this house foreclosed, will BoA come after me for? I read somewhere on the other site that HELOC lender can sue me if I let the house foreclosed. I did not use that money for any other thing, I just paid down my main mortgage, will they still come after me?