What if your worst nightmare came true? Do you think you’d have what it takes to pick up the pieces and start over again?

That’s the predicament Alexandra Penney faced in 2008 when she learned that her investment adviser was about to become notorious.

Alexandra is a writer, artist and the former editor-in-chief of Self magazine. She said all her life, she feared that one day she’d become a bag lady. That fear very nearly came true.

In 2008, she was living the life of her dreams. She had a vibrant and exciting second career as an artist, she had a lot of friends and a stylish apartment in Manhattan. Then one evening, the phone rang and her life changed forever.

After extensive research, Alexandra had trusted every cent of her earnings and savings to Bernie Madoff. She lost it all overnight.

She said she was suddenly faced with the prospect of losing all her belongings and moving in with her son in California.

How do you bounce back from catastrophe like that? She got busy.

She reached out to editors she knew, and within days, she was blogging for Tina Brown’s website The Daily Beast about her situation. That blog eventually turned into a book, “The Bag Lady Papers,” which is currently racing up the best-seller list.

Alexandra explains what to do when your worst fear comes true, whether it’s the death of a spouse, a divorce, foreclosure or even total financial ruin.

She says she’s still broke, but a little less panicked. Plus, now that she has faced and survived her worst nightmare, she says she’s learned to see the silver lining and move on.

Alexandra offers survival tips and even has advice for how long each day you’re allowed to pity yourself during trying times. Plus, find out why she thinks women tend to have these terrible fears much more than men.