Starting Over, Financially

How to recover after hitting rock bottom.


Dear Alpha Consumer,

I lost a very good job with benefits and everything. I lost it. Then I got into an accident requiring $40,000 surgery, and I started a business that failed.

Not a good trifecta. I went from a 700 credit score and money to spare to having $100,000 debt, little to no income, and Chapter 7 bankruptcy.

I am very upset. I feel like I threw my life away. I basically lost everything—my home, my fiancé—and now I'm in school and living at my parents'. (I'm over age 30.)

I don't want to sound like a baby. I know it's not the end of the world, but I would love if you could tell me why it isn't.

What an experience you've been through. In retrospect, maintaining health insurance through your former employer's COBRA plan might have helped avert some of the debt pile-up, but there's no point in looking back now. It's time to start over.

Since your question is more psychological than financial, I asked Marcia Brixey, author of the The Money Therapist: A Woman's Guide to Creating a Healthy Financial Life, for her advice. Here's what she had to say:

I'm so sorry for all that you're going through. But, trust me when I tell you—it's not the end of the world. A passage from O, The Oprah Magazine has helped me get through some tough times and hopefully will help you, too: "Gratitude comes easily when our lives are in order—when the bills are paid, the children are behaving and our health is good. But our challenges are what bring the chance for transformation. And it is during our deepest pain that we can be most grateful, because we know our hardship will deliver a lesson that redefines our character. As you practice gratitude, give thanks not only for what you have, but also for what you've escaped. When difficulties arise, ask yourself, 'What is the lesson for me in this?' And when you give thanks in the midst of your trial, know that you're becoming your finest."

I recommend you surround yourself with a good support system. It sounds like your parents might be the foundation. Reach out to your friends. Perhaps you're at a crossroads in your life and need some guidance on what to do next. How about working with a life coach? I know they cost money, but maybe you can find someone to work out a reasonable payment plan.

One of the things that have helped me get through the challenging times in my life is reading motivational and inspirational books. Some of my favorites include: Wake-up Calls by Joan Lunden, The Four Agreements by Don Miguel Ruiz, Deep Breath of Life by Alan Cohen, If Life is a Game, These are the Rules by Cherie Carter Scott, What's Next? Women Redefining Their Dreams in the Prime of Life by Rena Pederson, and LifeMoxie! Ambition on a Mission by Ann Tardy.

Just take one day at a time.

To that reading list, I'd also like to add one of my favorites about losing everything and starting over: Amy Cohen's The Late Bloomer's Revolution. It might even make you laugh.