How can I dig myself out of debt after losing my job?
I understand your situation. It is all too common. We all tend to think that status quo projects on forever (good job, sufficient income) - and then along comes Murphy (as in Murphy's Law) to shake everything all up!
Dealing with creditors on your own is challenging. If you are current on your payments, they will be reluctant to talk to you. What is their motivation? In fact, some of the debt settlement companies will tell you to stop paying altogether for a period of time - so they can bolster their negotiating position. (BTW - I don't trust any of the for profit companies!).
I like to start with essential living expenses. What is the minimum amount you need to survive. Rent/mortgage? Food, taxes, utilities, essential transportation, basic clothing. What are they now? Can they be reduced (i.e. can you sell house and rent an apartment until you get back on your feet, etc.). Subtract this amount from your income. The balance is what you have available to pay your debts.
If this amount is far less than the minimum payments on debts, then bankruptcy may be necessary.
Otherwise, what I would suggest is a "debt snowball" approach. If you can afford to, maintain minimum payments on all the debts, and put maximum effort into paying down the smallest debt you have until it is gone. Eliminating this debt will now eliminate one payment - and will give you a little more cash with which to attack the next smallest debt, etc.
If you are unable to cover all the minimums, it becomes a judgment call. You can try to attack the smallest debt, while short paying the others - as described above. However, once you short them, this will start collection calls. However, it may also increase the willingness of creditors to negotiate. Always talk to the creditors, be truthful, and explain that you want to repay in full, and are trying to avoid bankruptcy. Ask for lower interest rate, or other accomodation. You want to avoid having them pass this on to collection agencies. And if they do - you want to avoid case going into court.
If your best efforts fail, then bankruptcy may become your only option.
You may want to attend a Dave Ramsey Financial Peace University class. Google it. I am facilitating one near Clinton NJ in September, but there are usually classes starting up somewhere.
Best of luck, I note by zip code you are a fellow New Jerseyan.
I know this is more than just a financial puzzle. But I think you should stop beating yourself up to prove you're a good person, swallow your pride and take advantage of all the programs and laws that were written just for this kind of situation. New Jersey's Division of Disabilily Services has great resources on their website. For example you may qualify for assistance base on the specific condition for which you were hospitalized.
Since our current president has no qualms about declaring bankruptcy over and over, perhaps you should consider doing it just this once. At least you have good reasons.
You didn't state which assets you own. If you have retirement funds and/or a house, then you should concentrate on working out payment arrangements with all of your creditors in order to preserve as much as possible of your net worth. Usually a credit card company will allow you to pay only half in a negotiated settlement even though this is not widely advertised. You can even negotiate back taxes with the IRS.
However, if you have no real assets, then you should definitely declare bankruptcy so you can at least start from zero instead of from a large negative number.
Sounds like it is time for some expert advice. Here is a good article on choosing a debt counselor: https://www.consumer.ftc.gov/articles/0153-choosing-credit-counselor Non-profit is not the only requirement you should look for. A good counselor will be able to tell you if its possible and worth your time trying to avoid bankruptcy.