After a personal financial disaster, most people are left wondering what to do next. In fact, significant financial loss is such an incredible psychological setback to some people that they feel there is nothing they can do to recover from it. Divorce, suicide, and other tragic events occur every day because Americans find themselves in financial ruin.

This is going to be a multi-part series of articles discussing the process of financial recovery. I will be basing this series on both my own experience with financial recovery, which is just beginning as I write this, and the lives of people that I have entered due to their quest for tax debt relief.

The first place to start is to define financial disaster. Just because you're deep in debt doesn't necessarily mean that you're in complete financial ruin. Different people are all going to have their own interpretation of what it means to be financial ruined, but for the purposes of this series of articles I'm going to use my own definition. Here are the things I classify as financially destroyed:

* Straight up insolvency.

* You qualify for chapter 7 bankruptcy.

* You just lost your primary residence to foreclosure (or eviction because you couldn't pay rent).

* Creditors have seized assets, levied bank accounts, and garnished wages.

There are probably more things I could put on this list, but I think you get the idea. This situation can be created by any number of factors, too. Business failure, expensive medical problems, divorce, inability to pay tax debt, extended job loss, poor money management, stupidity...all of these can contribute to being broke and belly up.

Also, you don't necessarily need to be homeless and jobless to be financially ruined. There are very high income earners that get deep into debt, just as there are low income earners that turn into millionaires over time.

After defining financial disaster for yourself, the next important step is to take a reality check and admit to the fact that you're there, or are approaching it. People tend to live in denial when it comes to their financial situation, if they even know what their financial position is at all. It's important to take stock of where you, including analyzing your income and expenses and looking at your assets and liabilities. If that starts to sound like a budgetary counseling session in progress, it's because it is. Your finances are one of those few things about yourself and your life that you can distinctly quantify, and you can't figure out how to get where you're going if you don't know where you are.

In the next article in this series, we'll get into the process of figuring out where you are and making decisions about your plan for financial recovery.