After 15 years at enron, Wanda Chalk’s work as a human resources generalist had finally begun to accelerate, right along with the fortunes of the high-flying energy company. In her position, Wanda was responsible for company essentials such as filling staff positions, performance evaluations, and benefits counseling. But when Enron abruptly filed for bankruptcy at the end of 2001 amid fraud and scandal, Wanda got a pink slip.
To say that Wanda, 42, and husband Robert, 45, were devastated is an understatement. Wanda was pregnant with the couple’s third child and about to send their now 19-year-old son off to college. “I was the major breadwinner in the family with my annual income of $60,000, including bonuses,” says Wanda. “We were destroyed financially.”
Because 60% to 70% of her retirement assets were in Enron stock, Wanda lost at least $60,000 in her 401(k). And stock options that were potentially worth more than $150,000 became worthless. The family had to survive on Robert’s salary of $35,000 as a sanitation supervisor with PepsiCola, which was not nearly enough. Brandon, the couple’s eldest son, had to table his plans to go to a historically black college and is now attending a community college. The family turned to credit cards to bridge the gap and had to go on Medicaid and WIC.
“I had to turn to community assistance organizations for school supplies and to churches for groceries,” recalls Wanda. “If it weren’t for the Houston Area Urban League and Home Owners Assistance program, we wouldn’t have been able to keep our home that we almost lost to foreclosure,” she adds.
The Chalks tapped their retirement plans, which cost them dearly because they were hit with early withdrawal penalties. They owed the IRS $16,000, of which $9,000 still remains. Despite their financial maneuvers, they still lack enough resources to pay their bills on time. The Humble, Texas, couple’s credit rating took such a beating that they haven’t been able to refinance their home because they can’t qualify for a good interest rate.
For a while, Robert worked two jobs and Wanda worked temp or part time. Wanda finally found a full-time job in January paying $33,000, about half her old salary.
Two years after the Enron debacle, Wanda is healing emotionally. She had started taking medication for depression but no longer needs it. The financial recovery, however, is far from over. “We live paycheck to paycheck,” says Wanda.
The family has $5,000 in Robert’s 401(k) for retirement, no savings account, some $15,000 in credit card debt, and there’s nothing saved for 12-year-old Briana’s or 1-year-old Jaden’s college education.
With all of the challenges staring them in the face, Wanda remains positive, “I realize that, in some respects, I was one of the blessed ones. A lot of people got hurt at Enron. Some people in their 50s and 60s won’t be able to get jobs, and they lost their retirement money. I just want us to get back on track.”
THE ADVICE
Sandra Salter, a financial advisor with American Express Financial Advisors in