Q: It's been nearly four years since my husband and I were in a motorcycle wreck. We recovered physically but not financially. We had no insurance, so I charged our medical bills; now the credit card companies are coming after us. Because of the months we spent out of work, we used up our savings. In short, we have about $23,000 in debt, in addition to our monthly mortgage and car payments. Should we go through credit counseling to reduce the amount we owe?

A: Your situation is what 47 million Americans without health insurance have to fear every day: How will they cover their medical costs if they become ill or injured? It's my fervent hope that whatever happens in our next presidential election, our government leaders finally make it a priority to address the affordability and availability of healthcare for all. No one should have to go into this kind of debt in order to stay alive.

The credit card companies aren't looking for the $23,000 back all at once. If you could manage to pay just the minimum amounts due on your monthly bills, that would satisfy them. Of course, that could be tough; your minimums probably total more than $700 per month. But you need to be very careful about seeking third-party assistance. A credit counseling service (use only someone recommended by the National Foundation for Credit Counseling; consult NFCC.org) can help you out through various means, but not by reducing how much you owe. That strategy is pushed by debt settlement companies, and I don't want you taking that route. They charge a ton in fees, and your credit report will be wrecked for years; after all, the creditors are going to report that you repaid only a portion of what you originally owed. But by striving to meet the credit card minimums, your credit scores will improve, which could help you qualify for a lower interest rate (or possibly a balance transfer to a card with a lower rate).

Next, pull out your tax return from the year of your accident. If your total medical costs for that year—not just from your injuries—were more than 7.5 percent of your adjusted gross income, you were eligible to claim all your medical costs as a deduction. If you didn't take advantage of this tax break, look into filing an amended tax return; any rebate can be used to pay down your debt. (But you need to hustle: The deadline to file an amended return is three years from the date you filed the original. I'm assuming you still have a little time because you probably didn't file a return until the following year.)

Finally, look at your monthly expenditures for places to cut costs. You mention having multiple car payments; perhaps you can get by with one vehicle for a while.

Please note: This is general information and is not intended to be legal advice. You should consult with your own financial advisor before making any major financial decisions, including investments or changes to your portfolio, and a qualified legal professional before executing any legal documents or taking any legal action. Harpo Productions, Inc., OWN: Oprah Winfrey Network, Discovery Communications LLC and their affiliated companies and entities are not responsible for any losses, damages or claims that may result from your financial or legal decisions.


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