After The Storm

They say trouble comes in threes. That was certainly true for Ken and Tonia Chambers. The tragedy began with the unexpected death of their 18-year-old daughter, Rachelle. The dissolution of the law firm where Tonia worked as a paralegal and the necessity to file for Chapter 13 bankruptcy followed.

It’s been a little more than three years and the Kansas City, Missouri, couple is finally starting to breathe again. “You don’t expect your children to go before you do,” says Tonia, with a numbness that may never go away.

Rachelle had gone to visit an older sister at college in Minnesota. Along with friends, they headed to Chicago to have some fun but met with danger instead. “Someone attacked their group for no reason and my daughter was shot in the neck and died,” she explains.

The grief and shock still stain their hearts, and the financial damage remains as well. There was no life insurance policy on Rachelle, so the Chambers had to handle the expenses themselves. All told, they ended up with $15,000 in bills. They drained $10,000 of their savings and borrowed $5,000 from family and friends.

“Her death was the beginning of a downward slide,” says Tonia. Soon thereafter, the law firm Tonia worked for reduced her salary by more than $10,000 as it was downsizing and reorganizing. Ultimately the firm dissolved. “Making so much less really hurt us at a time when we were trying to rebuild our savings,” she says. Of their four children, the youngest, 17-year-old Patrick, is still at home.

Indeed, by October 2005, the financial damage had been done and the Chambers elected to file for Chapter 13 bankruptcy—committing to pay back $18,000 at $500 a month for three years. A year into the bankruptcy Tonia found another full-time position, and the Chambers now have a household income of $110,000.

“Before our daughter’s death we had substantial debt,” says Tonia, 46 . “We would take weeklong vacations and charge everything.” Says Ken, a staff attorney for a law firm that provides legal services to union employees, “We are educated, but we weren’t educated in the financial arena; we didn’t understand how money works.”

The family has cut its spending. They now take shorter vacations and spend less at the grocery store. And credit cards? Those days are over. Ken says one smart thing they did was take advantage of Chapter 13, a form of bankruptcy that allows them to pay overdue bills to the court, yet keep their house. “With Chapter 7 you get out of debt, but you lose your house, and my 401(k) could have been in jeopardy.”

And safeguarding those retirement assets—combined at more than $179,000—is key. At 58, Ken would like to start his own business, but can live with waiting up to two years. His original goal was to retire from his current job when he turned 60 with at least $300,000 and start a legal consulting business.

For now, the Chambers have begun to put $200 monthly toward an emergency fund. While Ken has