Financial denial is being aware that something is just not right about the overdrafts, loans, store cards that are mounting up, but not having the energy, inclination or motivation to do anything about it! Believe me, I know this one as I was in financial denial for years. We are in financial denial when we only have enough money to pay the monthly service charge on the credit card or when all of our salary goes into clearing the overdraft. Overdrafts can mask what is really going on i.e. that there is not enough money coming into the account to cover what is actually going out.

We are all aware of the credit crunch and, slowly but surely, may have found our avenues for credit drying up. Not gaining access to credit is another way of having to come to terms with being in financial denial. Our options for credit run out, forcing us to look at the truth of what has really been going on with our financial management.

Coming out of financial denial can be a torturous time for the debtor. This is the period between wakening up to the fact that we are overextended with credit and finally having to do something about it. We are faced with taking responsibility for our financial decisions. In my case, I had built up various loans and overdrafts which, whilst originally serviceable, suddenly became less so due to the fluctuations of my self-employed income and my newly divorced single parent status.

Hindsight is a wonderful thing and the more I moved into financial reality, the more I realised just how unwise some of my financial transactions had been.

I was naive around financial institutions. I thought that as long as I was being offered loans, I must be a good credit risk and therefore everything was okay. Surely they wouldn’t lend money unwisely? Whilst we all have seen the outcomes of irresponsible lending, it is my belief that debtors still have to take responsibility for taking on the loans. We don’t have to bludgeon ourselves around the head with this but if we can take responsibility for creating the debt then we can also take responsibility for getting out of it and moving on to wiser financial choices. Being accountable for the debt will help later on when we talk to creditors or the advice agencies. By facing up to our financial decisions, we can move on in an empowering way which does not see us falling prey to every manipulative creditor phone call or letter we receive.

Accepting the part that we played in our own over-indebtedness frees us from judgement or shame. We made mistakes with money and now we are doing what we can to rectify it. There is nothing more that can be asked of us. Not everyone will have trodden the same path as a debtor and that’s why I think there are so many judgements held by society regarding those who get into trouble with money.

The advice agencies often cite that divorce, ill heath, redundancy and bereavement are the main precipitators of becoming overextended with credit. I know that not everyone who has to face these life changing events will get into debt, but it does not take too much imagination to see how it can happen.

Overspending on luxury items and unaffordable lifestyles can be the result of low self-esteem that requires our understanding, rather than being an act of out and out profligacy.

We also seem to live in a society that champions the consumer over the citizen, with all of us being encouraged to spend, even in a recession!

Coming out of financial denial can be a dangerous period as we are often on our own with very intense feelings of shame, failure and humiliation to contend with. The fog has lifted from our financial denial and we are facing up to reality. The creditor letters are piling up, the phone is ringing and suddenly we can see the results of our disastrous financial decisions.

Please do not even think of ending your life at this point. All debt is manageable. Whilst it may result in losing the house (which is often the worst fear for lots of people), a home is not worth losing your life over. There is a lot of help out there particularly on the excellent ‘Debt Divas’ site with access to approachable, capable insolvency professionals. In the meantime we have taken responsibility for our debt so when the creditor calls or writes we can hold our head up high and say that we are dealing with it or that an agency is working on our behalf.

As we come out of financial denial, don’t be afraid to feel the feelings; they won’t kill us. Shame, anger, failure and humiliation are not the truth and they will dissipate no matter how awful they are. We are not failures in life just because we didn’t have access to financial literacy programmes that children are now accessing in schools. Try to nurture yourself through this time by eating well and getting enough sleep. There is light at the end of the tunnel. I know, I have been there and came through it. If I can do it, you can do it too. We are not alone with this; coming out of financial denial can be hell but there is a lot of assistance we can access. We are more than worthy of this help.

Kate Judge All rights Reserved 5/1/09

www.shamedbycredit.co.uk

Read Kate’s articles: The Emotional Side of Debt Open Those Creditor Letters

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