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In 1989 and 1990 my financial life swirled the bowl and went down the toilet, resulting in my personal bankruptcy. My shame and my disgrace, which I kept silent and my secret until 2000 when I got outed by a Washington Post reporter when she asked me, only in passing, during an interview if I had ever been bankrupt.

The irony is that when I was initially asked, I lied. I could not face that immediate truth. It took me by utter surprise and sent a bolt of, I guess adrenaline, through me as I cam face-to-face with my worst secret. After she left and I dealt with the fact that I had lied to her did I come to terms with it and call her back to set the record straight.

Less than a handful of people knew about my bankruptcy, even my closest friends did not know. People to whom I would have confided in some secret tragedy that had befallen me, cancer, pending death, or maybe a secret affair. But my bankruptcy, no, that was a secret kept tighter than the nuclear codes. And I kept that secret for a decade. Until Jacqui, the reporter, entered my life.

What I Had Already Come to Know About Debt

So having lived through financial misfortune and gone on to hep others deal with dealing with their own money troubles I always knew one thing, that money problems are not about the money, they are about the underlying issues and situations that brought us here.

What do I mean by that? Well, in most cases the debt, the overwhelming obligations that you owe are the symptom, not the problem. They are the byproduct of other things, created, contrived, or just utter bad luck.

For the compulsive shopper that winds up over his head in debt. The credit card isn’t the issue, it’s the symptom. And for the family business that winds up broke and the family home is on the edge of foreclosure, it’s the symptom. The real problem is what caused the family business to fail.

Overwhelming bad consumer debt problems are the feces of life. I have never met a single person, out of hundreds of thousands of people, that set off with a primary goal of wanting to be in piles of bad debt and didn’t care how.

The Real Problem of Too Much Debt

What almost every single personal finance guru and pundit misses about consumer debt is that the pain is not caused by the debt. Debt is just a numerical number. It is as sterile as math can possibly be.

The size of your debt has no feeling. It doesn’t care. It’s a number marked with a currency symbol be it $, £ or €. It has as much intensity as the number 7.

No the real problem of too much debt is not the number but the level of emotional misfortune that people feel, Emotional misfortune is the key here. It is the real problem of consumer debt. It is the painful, personal and paralyzing factor that makes people murder and make them feel as if I want to kill myself because of my debt.

It’s Not Just The Fault of Finance Experts That We Got This All Wrong

I think my company in the states was the first in the world that had a staff psychologist to help deal with these issues, that provided emotional counseling for people in debt, that built the first in-patient treatment facility for spending issues. No, we had that part right but it could not make enough money to support itself simply because people don’t put value in resolving the emotional misfortune rather than just waning the numbers to add up differently.

While the level of emotional misfortune brought on by the debt is the real human molten red iron rod that seers, as a society it is hard to get the individual past the emotionless number part.

If someone comes to me in a blind panic or a simmering depression over the current state of their financial situation, there is currently no course of treatment of that condition that can lead to a positive outcome.

Here is what I mean. The debt can be addressed and resolved with a combination of legal or lifestyle solutions. For example, bankruptcy, debt consolidation or cutting back spending. All of those are technical solutions address the problem of the numbers.

But what we don’t have is an awareness by people, a willingness to accept by creditors, or an acceptance by pundits that the real pain of financial problems is caused by the intensity of the emotional misfortune you feel when you are in debt.

Emotional misfortune is that level to which you can or cannot handle change and bad news in your life. It is the way it makes you feel to have to face and deal with moving out of a home or neighborhood you can no longer afford because you fell for a sucker subprime mortgage and now you’re in a credit crunch.

It’s the emotional pain of hiding your SUV so the repo man doesn’t come find it or the emotional stress of juggling lies to explain why strange people are calling your neighbors, looking for you.

The intensity of too much debt isn’t the debt, it’s the pain that it creates for us in our real lives. And the answer to this pain can be easy if we recognize what is making us feel horrible when in debt. If we can accept the reality of our financial situation and have an awareness and deal with the issues that are causing us pain, we can actually deal with it almost painlessly.

Huh? I can hear you now. What I mean is that if I accept that I can’t afford to pay my bills and I am willing to change my lifestyle to afford to live within my income, then I can take the logical steps to address or dispose of current debt so I can move on, without remorse, pain or shame.

The shame of financial misfortune leads to a tumbling down of our self-worth, self-esteem and self-confidence. That crumbles down into our view of the future, relationships and our daily life. All of those result in changes that can impact the rest of our natural lives. “I am a failure”, some will believe. “I am a loser” or “I am ashamed” will ring in the heads of people in debt.

I guess for me it must have been the “I’ve failed” or “I’m a loser” chorus that sang inside my brain and kept my bankruptcy secret silent for a decade. I’ll have to think about that one some more.

For me, I really do owe a debt of gratitude to Jacqui Salmon, the Washington Post reporter that made me face that secret. The irony is that she’ll never realize ow that one simple question and making me face that secret made my life so immensely better. And it was ultimately dealing with that dark underlying secret that helped me realize that for all the people I care about, the fact they now know I went bankrupt, really doesn’t matter.

I’ve got more to say on this subject but I’m going to let it percolate some more in my head before I write about it. I’ve got to think about how to make the concepts come out coherently so they are easy to understand. That’s not always easy to do for me on the first pass.

I’d love to hear what you have to say about all of this. Don’t be shy. Comment.

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Steve

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