It's not exactly B.S. that they want you to pay up your old debt. They just aren't going to take a chance on you because you might do it again and default on the mortgage.
Unfortunately, not everyone gets to buy a house when they want to. It's not the right time for you, stay where you are for a while and try to pay off what you can.
You seem to be of the mind set that you can run up debt, not pay it and all will eventually be forgiven. That doesn't look good to lenders. File bankruptcy now, wait 5 years, then apply for a mortgage. Your 1 year old doesn't care where she lives, so that's not a good reason.
You got yourself in debt, you need to fix it yourself.