Climbing the ladder of success rung by rung can be a slow process. But once you get there, the opposite experience -- sliding down the chute of economic despair -- can happen all too quickly.
Those in the financial problem-solving business witness this riches-to-rags pattern every day. From their vantage point, it's easy to see how anyone -- no matter what their background or financial means -- can let bad money habits lead them into hard times.
"Even if you earn a law degree or have a high rank in the military, that doesn't mean you necessarily know how to handle money," says Albert Guadiano, counseling director for the Consumer Credit Counseling Service of Greater San Antonio.
Facing financial failure is tough for anyone -- perhaps even more so for successful people who want to keep up the facades of their former statuses. But eventually, they must take action to avoid total disaster -- and often that action is turning to a credit counseling organization.
We talked to credit counselors (one who is a former debt collector) across the country, and came back with five extreme cases of clients who went from riches to rags.
1. An athlete's sports car addiction cost him his retirement.
The lifestyle of a professional athlete can be glamorous. But it's easy to get caught up in the trappings of big paydays and life in the limelight, and end up broke.
Guadiano worked with a pro athlete in San Antonio in his mid-40s whose road into hard times was paved with the purchase of too many toys, and a failure to plan for retirement.
The athlete came to Guadiano with $100,000 in credit card debt, $200,000 in loans for two sports cars, a $200,000 loan for a luxury cabin cruiser, and a look of terror on his face. His sports career was at an end, and he had attempted to get a job with a life insurance company. But he was turned down when his prospective employers saw his credit report.
Initially, the athlete started a debt management plan with fixed payments to eliminate his debt, but since some of his toys had been repossessed and he had judgments for non-payment of other bills, he eventually dropped out of the program and declared bankruptcy.
Guadiano saw him recently and said he seems happy without the trappings of the high-profile lifestyle and is gainfully employed at a nonprofit company that works with cancer survivors.
2. A trust fund baby wracked up $300,000 in gambling debt.
Ashley Adami, a certified credit counselor with ClearPoint Credit Counseling Solutions in Portland, Ore., worked with a woman in her late 40s who lived off a monthly income from a trust fund, but had accumulated $300,000 in gambling debts.
"She lived in a home with a lot of home equity and a small mortgage, plus she owned a second property without any mortgage," says Adami. "She came to me because she had a gambling addiction and her therapist told her to get some financial help."
The woman's credit score had plummeted, yet her favorite casino continually loaned her money to cover her gambling because they knew she had assets to sell. In the end, she sold her second home to pay off her debts. Her credit improved and she was able to refinance and keep her primary residence. She also found a full-time job. While this woman didn't end up in rags because of the cushion of her trust fund, she needed to make some dramatic transformations to her life in order to clean up her debt problem.
"Although she still struggles with her gambling addiction, it's under control now and she's much happier working full time," says Adami. "Not only is she earning a living, but she's keeping busy and feeling productive."
3. A military officer put way too much cash into his new home.
Another of Guadiano's clients, a high-ranking noncommissioned military officer, was making a good income, but got caught up in buying expensive furniture for a new home, a costly car, and a high-end truck. He wasn't eligible to reenlist, and so he retired at an income that was about half his previous salary.
"He struggled with a debt management plan for about a year," says Guadiano, but then he wound up getting a job as an overseas security advisor through his military connections. He went back to Iraq and earned enough money to pay off all of his debts.
"He's a lucky guy to have had the connections to bring in the income to get him out of the hole," says Guadiano.
See the rest of the story at Business Insider
Please follow Your Money on Twitter and Facebook.