If I was in that situation, I would do my best to increase my income and decrease my expenses. I'd focus on the basics first like housing, food, utilities, and then I'd add in there the minimums to the CCs at least and any other fixed monthly oblgations. Next, I would take whatever is left over and work out a budget plan with your medical providers. IMO, list all of your debts, and while paying minimums that are needed to keep from a default, throw any extra cash at your lowest balances first. Why? For a couple reasons: 1) if something were to happen again, then at least there will be fewer accounts in jeopardy because some would have been paid off. 2) Per FICO scoring, for those that report, more $0 balances reporting will lead to a better score. And 3) Psychologically, you'll feel better with more debts paid.
Per decreasing expenses, I'd go crazy if I had to to be debt free. I'd cancel cable and any subscriptions like newpapers, etc. If I had both a cell and a home phone, I'd cancel one. I'd stop any savings or investing plans (e.g. it doesn't make sense to earn 10% on avg. in a 401(k) if you are paying 20%+ in APRs per your CCs). I'd postpone any hobbies as they are expense killers at times. I'd look at every transaction made in checking(s) and CC(s) and see what I wasted money on and vow never to do it again. I'd also hide or cut up my cards until I had the debts paid off.
I'd also reposition money. If I got a tax refund, then I'd adjust my W-4 to reflect a $0 balance in taxes owed at the exnd of the year (you can tell your employer to withhold $x as opposed to 1 dependent, 2, etc.). I'd do the same for state. If I had a savings in a non-tax qualified plan like in an ordinary savings or savings bonds, or a whole life policy or something like that, then I'd liquidate those to throw at the debt (be mindful of an emergency savings though). If I had any assets to get rid of like an extra car I'd sell that too. I'd also go through the house and have a yard sale or get to know ebay or craigslist very well in getting rid of unwanted junk.
Finally, I'd look at my income. There are 4 ways to make income in this country: employment, self-employment, big biz ownership, and investments. I'd tap into all four and diversify your income like you should do with investments. While you may no be ready for investing because of the debt, it won't hurt to add extra income via another job or a biz of your own. That way, if your paychecks bobble in the future due to some life event, you'll still have income coming in. Unfortunately most people put all of their eggs in one basket and most folks are a job loss and 30-60-90 days away from a BK.
