Imagine losing most of your money and possessions as a result of having to declare bankruptcy. How would you react if you were faced with such a financial fiasco?

By June 2003 over 1.6 million people had filed for personal bankruptcy over the past 12 months, says the Administrative Office of the U.S. Courts.

These Americans are discovering exactly what it means to have their credit report stained with a scarlet “B.” Unfortunately, many of those individuals will never fully recover from their money problems.

The good news is that bankruptcy doesn’t have to be the last tragic chapter in one’s life. Even if you’re flat broke, you can still gain hope from studying the careers of some shrewd entrepreneurs for whom bankruptcy was just a temporary setback on the way to attaining incredible riches.

Survival tool no. 1: Courage

One of the toughest parts of enduring a bankruptcy is the emotional toll it can take on a person. Being able to survive this depressing period can bring unlimited rewards, as Henry John Heinz proved during his lifetime. In 1875, the future founder of the world famous H.J. Heinz Corporation was a partner in a successful company which produced processed condiments. Not even psychic Jean Dixon could have foretold that an unexpectedly phenomenal produce harvest would soon destroy the company by causing payroll and purchase expenditures to soar.

The 31-year-old Pennsylvania native’s personal diary describes how he became ill and stressed during his failed efforts to save the enterprise. The company’s downfall also drove away Henry’s friends and business associates and even left him without any money to buy Christmas presents that year. The episode was so painful to Heinz that for many years the company’s official history never mentioned the bankruptcy.

A less courageous man might have decided that he wasn’t cut out to be a businessman. But it took Heinz only a few months to start another business venture along with his brother and a cousin. Their $3,000 investment eventually turned into what is now a $9.2 billion food giant.

Paula Langguth Ryan, author of Bounce Back from Bankruptcy, believes that, like Heinz, debtors must have the courage to forgive themselves for their past mistakes. The Baltimore-based credit counselor was forced into bankruptcy at the age of 21 when she accumulated $35,000 in credit card debt. She has since made a complete recovery and claims that she was awarded a credit card, a car loan and a mortgage loan even with a bankruptcy on her record.

“Some debtors get too tied up in the emotional aspect of the bankruptcy,” Langguth Ryan says. “They think that because they’ve made some mistakes that they should be punished for them indefinitely. People need to tell themselves, ‘I took the steps to understand my problems, and now I need to fix them and move on.’ You can’t let old creditors control the rest of your life.”

Survival tool no. 2: Ambition

Going through bankruptcy will make almost anyone lower his future financial goals. However, most people aren’t like real estate developer Tim Blixseth. The 48-year-old California resident’s wealth has been recently estimated at hundreds of millions of dollars.

Based on his upbringing, Blixseth was an unlikely candidate to have achieved such a fabulous fortune. He grew up in a welfare family in a small southern Oregon town. Despite his underprivileged background, the young deal maker’s ambition and gift for buying and selling timberland made him a millionaire by age 28.

Blixseth’s jet-setting lifestyle came to an end in the 1980s when the timber industry hit bottom. He filed for personal and corporate bankruptcy in 1986, listing $16 million in debt, according to “Your Company” magazine. The former millionaire started his comeback by persuading the owner of a Portland trucking firm to join him in an effort to buy 300,000 acres of timberland from a British financier. Blixseth and his partner invested $500,000 each and borrowed the rest of the money necessary to purchase the land.

The timber industry eventually rebounded, and their company soon became one of the region’s major players. About a year later, the partners went their separate ways and Blixseth sold his interest in the company for a cool $50 million. He now lives on a 240-acre estate that also features a $30 million, 18-hole golf course.

The wealthy businessman had big goals even as a youngster, and that vision is still evident today as Blixseth has begun building a mammoth private ski resort for the rich and famous in southwestern Montana.

Langguth Ryan believes that making a list of goals, even simple ones, is a key to economic recovery.

“Set realistic goals that are attainable,” she says. “You may say, ‘Once every two weeks we’re going out to dinner.’ Then you can start saving the money that you’ll need to do that. If you want to take a trip, then know exactly what it will cost you. Call a travel agent, and find out about the expenses involved.”

Survival tool no. 3: Determination

Individuals who have recovered from bankruptcy often show an unyielding refusal to quit. In the case of Rowland H. Macy, the founder of the Macy’s department store chain, had ample reasons to give up on his dream.

The Massachusetts merchant’s first four stores failed, with the last one going bankrupt in 1855, according to Nathan Aaseng’s “Close Calls: From the Brink of Ruin to Business Success.” That failure led him to move to New York City, where he found that customers responded to the same techniques that had failed before. Macy’s store had become the largest in the world by the time he died in 1877. Maybe these entrepreneurs’ experiences can serve as a powerful lesson for the rewards of perseverance.

Here are a few more of Langguth Ryan’s tips for getting back on your feet financially:

  • Seek to develop new spending habits. Contact a professional credit counselor through a group such as Myvesta.org at 1-800-MYVESTA (1-800-698-3782) or the National Foundation for Consumer Credit at 1-800-388-2227. They’ll help you set up a budget for free.
  • Ensure that your financial records are updated by obtaining a copy of your credit report from each of the major credit bureaus: Experian, TransUnion and Equifax. If your information was not properly transferred, then your credit report may show that you’ve filed for bankruptcy and have delinquent debts.
  • Don’t forget to look after your inner self. It’s easy to get depressed about your debts, but you can accomplish more by giving something back, such as tithing your church, to the people or organizations that raise your “positive energy.” Even the seemingly unusual notion of forgiving other people’s debts can free up other sorts of energy that would be poorly spent fretting about money owed to you.