Scary Money Moments: How 5 People Survived Their Financial Nightmares

Gather around, friends, and listen closely to how five people encountered frightening fiscal situations -- and lived to tell their tales. U.S. News asked readers to weigh in on the scariest financial moments they've encountered. Here are their responses. Answers have been edited for length and clarity.

[See: 9 Scary Things Consumers Do With Their Money.]

"Rosemary's Baby ... Has No College Fund"
Peter J. Creedon, certified financial planner, Crystal Brook Advisors, New York City

"I [had a client who] came to me for retirement planning and revealed [that] she had put her child through the last two years of college by putting expenses on a credit card. [We] designed a plan to pay off debt, renegotiated interest rates, looked at alternatives to credit cards. [She] paid off debt with [a] carefully designed plan while defining and keeping [a] realistic retirement plan. [The] client retired debt-free. ... Moral of the story: Before incurring [a] major expense, develop a plan on how you are going to afford the item."

"Night of the Living Debt"
Pegi Burdick, 66, author and founder, The Financial Whisperer, Los Angeles

"In 2007 I was on my own personal financial cliff. My marriage of 11 years was over. The debts we had accumulated reached $50,000. We had to move out of our expensive beach house. I was jobless. I was the plaintiff in a lawsuit. My dog was dying, and I needed gum surgery. ... I read books that steered me in the direction of being honest and real with myself. ... [I] took responsibility for making poor financial decisions, like loaning someone $250,000. ... I stopped picking up the check and 'loaning' people money."

[See: 8 Big Budgeting Blunders -- and How to Fix Them.]

"The Nightmare on Wall Street"
Jerry J. Davis, certified public account and personal financial specialist, Davis & Graves CPA LLP, Gresham, Oregon

"Years ago [in] 2000 [or] 2001, I had a tax client in my CPA practice who had a very large holding percentage-wise in Enron. I advised him to sell the security since it comprised over 75 percent of his investments. Miracles of all miracles, he did -- in January 2001 -- just before the collapse. When his 2001 return was completed, he actually called me and said, 'I am a very happy client sending a large check to the IRS.' Yes, he had to pay tax on the gain, but he still had the gain! I use this story regularly to emphasize what can happen with concentrated holdings."

"An American Werewolf in Abu Dhabi"
G. Brian Davis, 35 , co-founder and director of education, Spark Rental, Abu Dhabi

"Last year I moved across the world with my wife, from Baltimore to Abu Dhabi. I had a telecommute job managing an e-commerce company, so I figured moving would be no sweat. But shortly after I moved, the owner of the company restructured it and laid me off, deciding to come out of retirement to manage the company himself. You can imagine how terrifying it was, being in a foreign country with no job, no connections, no unemployment benefits ... it was a nightmare. My wife had taken a two-year position here, but the pay was nothing to write home about. Our home back in the States was rented out and unavailable, and we had spent quite a bit of time and money organizing the move across the world.

In other words, we were stuck in Abu Dhabi.

But as I looked down over the edge of the abyss, a brazen idea started forming. I've always been drawn to the idea of starting my own business, and I suddenly found myself with no easier options. Maybe now was the right time to take the leap, when there was nowhere further to fall? I approached a friend and former colleague, and we explored the idea for countless hours over the course of months. We decided to take the plunge, and [our business] was born!"

[See: 11 Expenses Destroying Your Budget.]

"Invasion of the Job Snatchers"
Tina Pennington, 54, author and public speaker, Red & Black, Sugar Land, Texas

My husband came home from work and announced that he had been fired. Although well educated, I was a stay-at-home mom that had always let someone else take care of the finances -- first my parents, and then my husband. I was scared -- very scared -- because I knew nothing about personal finance, let alone our finances. ... My husband getting fired helped me learn to take control of my life versus my life controlling me. And, maybe more importantly, it allowed me to teach my daughters the same lessons I learned.

Susannah Snider is the Personal Finance editor at U.S. News. She previously covered paying for college and graduate school. You can follow her on Twitter or email her at ssnider@usnews.com.