I nearly got into such a situation as well. Luckily I never reached the bottom the way you did, but to be honest, that is only thanks to my mother in law who was always willing to help me out. (And should the need have arisen, both my mother in law and my parents would have offered us to move in with them if needed.)
Two years ago now, we made the difficult decision to leave Israel and start a new life abroad. I found a job in the UK and we moved there. We were only able to move thanks to huge amounts of financial and material support from my mother in law, my parents, and a friend of me. Now, we are financially independent and paying off our loans. This past summer, we even went on a holiday for the first time in years. We are still paying hundreds of pounds per month (perhaps $500) on debts.
Indeed, others sometimes also seem bewildered by us living in a cheap, small apartment on a street of non-Jews (while most people live in big expensive houses). They don’t understand how that could be, when I have a decent salary. Also there is, I think, a prevailing attitude that anyone who works fulltime must be much better off than those in kollel. Well, in Gateshead, tons of kollel families live in big houses and have cars and go on holidays – I do not have the first and second, and the third is extremely rare.
That said, we are seriously improving. A huge setback was that my wife’s employer has reduced her hours from 20 to 8 per week. We just about finished paying off a loan of $300 monthly, and now we’re getting a setback of $300, so we’re basically stuck at the same level as before instead of having $300 more to spend.
Still, I cannot imagine what would have happened had we stayed in Israel. We did the right thing by moving. It’s not easy – especially for my wife, who really misses her family and cannot go to see them regularly (getting to E”Y from here costs about the same as from NY). For me it’s a lot easier, since my family live in the Netherlands, just across the North Sea – it costs 1/5th of the cost of going to Israel.
As for setbacks, consider my wife had severe trouble with her ankle and had 5 surgeries over the past 4 years, which left her unable to work for long times. Only recently has this been resolved, hopefully permanently.
Anyway, why did I share all this? To show you that there is a way out. I don’t know whether your or her parents can help you, but if it’s possible, I’d suggest moving in with them for a while. Even if you have to fit all of you in a little room and you won’t be able to keep most of your belongings, it’s worth it. You can use the money you save on rent to pay off your debts and improve your situation. That would have been our plan if we had not managed otherwise.