Home > Managing Debt > How I Went From a Six-Figure Salary to Bankruptcy & Back

Comments 0 Comments

The idea that someone who plays by the rules — works hard, pays their bills on time and saves for the future — can go bankrupt seems a bit absurd, until you talk with someone like Mark Quesenberry. None of those things kept him from winding up in bankruptcy court, a place he never thought he’d find himself.

Until 2010, Quesenberry earned a healthy six-figure income. His career included nearly 20 years in business development and consulting, and involved traveling across the U.S. and working with large financial institutions and Fortune 1000 companies. Closing a seven-figure deal with a client wasn’t an unusual event.

But in 2009, the firm he was working for was acquired by a competitor, and it didn’t take him long to realize his new employer was not a good fit. He had no problem finding a new job, landing with another firm within the competitive financial services field where he worked.

And that’s when all hell broke loose.

About two months into his new job, his former employer threatened his new employer — and him — with a lawsuit over a noncompete agreement. The new employer’s attorneys assured him he had nothing to worry about, since California — the state where he lives —  doesn’t recognize such agreements, and they had fully vetted the agreements signed with his former company. But his old employer decided to play hardball and filed suit anyway.

At first his new employers defended him vigorously, but eventually they decided the mounting legal bills were not worth it and let him go, leaving Quesenberry with no job, a pending lawsuit and no immediate prospects of other employment. “When you get fired from a job three months into (it)” it’s hard to find other employment, he points out. “Plus no one wants to hire someone with an active lawsuit.”

A Quick Downward Slide

As things dragged on, he began to see his financial life crumble.

Prior to this, he says, he was a “relatively secure white-collar executive used to making a healthy six-figure salary.” He had the house, cars, 401(k) plan, and 529 plan for his children’s educations to prove it.

As his unemployment dragged on, however, a large portion of this savings went to pay living expenses. When he learned he was at risk of losing his home, and wanting to protect his children’s assets from any negative outcome of the lawsuit, he decided to file for bankruptcy. After he paid some of his bills ahead, his bank accounts were down to nothing.

“That’s a very odd feeling when you are used to seeing a healthy balance in your bank account,” he says.

Finally, in 2011, he got a solid lead on a new job with a firm in the financial services sector. One hitch: They were going to run a background check, including a review of his credit reports.

Quesenberry decided to be proactive and tell his prospective employer exactly what they would see. “It’s a very embarrassing and humbling experience,” he says. In addition to explaining the situation, he provided them with the documentation to back up his story. To his surprise, they were understanding, and the bankruptcy did not derail his chances. He got the job.

Lessons Learned

Throughout this ordeal, he and his wife were open as they could be with their children, who were ages 13, 10, 6 and 1 when it all started. They have learned something in the process, he says. “My kids have recognized that you can have all these things and they can be gone in an instant. The most important thing they can learn is adaptability,” he says.

As for his credit scores, watching them drop was painful. During his pre-bankruptcy credit counseling session, he was was getting weekly, then daily, credit score updates and he saw them plummet from an initial high of 810-830 down to the 570-610 range where they hover today.

“In those first days and weeks it was like watching the stock market crash,” he observes.

These days, he finds himself frustrated by a credit system that doesn’t seem to have a place for him anymore. When he bought a car recently, for example, he considered getting a loan for half of the cost of the vehicle in order to rebuild credit. He was shocked when he couldn’t get a loan, despite the fact that his income could be verified and he had enough money in the bank to pay cash for the car — which he eventually did.

For the most part, he now operates with a debit card and cash. And in some ways, he doesn’t mind. “It’s been a very liberating experience,” he says. “I am three years out (of bankruptcy) now and I would say if someone came up to me and said, ‘Here’s your $35,000 limit back at Amex or Chase, etc., I don’t know if I would take it’.”

If you’re working on rebuilding your credit like Mark, it’s important to know where you stand so you can track your progress. You can pull your credit reports for free once a year from each of the major credit bureaus, and the free Credit Report Card will show you two of your credit scores for free and help you understand how your credit profile is impacting your scores.

More on Managing Debt:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team