Group Helps Debtors Cope With Urge to Abuse Credit

The attractive, well-dressed blond woman squirmed on the sofa, stared at her soiled tennis shoes and told a roomful of people that she would rather they saw her naked body than her overdrawn checkbook.

Across the room, a young attorney in a three-piece skirted suit, voice quavering, said her boss had delivered a major blow that morning, telling her to find another job. She needed advice, she said, on how to squelch an inner voice telling her that she might end up “a shopping-bag lady.”

A middle-aged man spoke with rueful anger of having recently received a bill for 13 cents from Chase Manhattan Bank, a creditor he had worked for years to pay off.

The three were among 16 people at a meeting of Debtors Anonymous, a national self-help organization that provides help, advice and moral support for people in debt. The group meets every Tuesday at 7:30 p.m. at St. Catherine of Siena Church in Reseda, and in other locations and times in the Los Angeles area.

Inside the church one recent night, the group--almost evenly divided between women and men--sat in a semicircle on sofas, chairs and stools as a guest speaker, a well-dressed woman in her early 40s, described the compulsive shopping that the program has taught her to control.

Needed or Not

“I would go to the grocery store for a loaf of bread and come out with four bags full of groceries, whether I needed them or not,” the woman said.

“I had six or seven credit cards charged to the maximum, as much for the excitement as anything else.” She said she has no idea where the money went. “The only thing I have to show for all the things I charged is a television set. I can’t tell you what went on the rest of my cards,” she said.

After 18 months in Debtors Anonymous, she continued, “My checkbook doesn’t balance, but I have not bounced a check.” As the roomful of people applauded, the woman held up an envelope, filled with cut-up credit cards. “For me, that is a major miracle,” she said.

Although they are seeking to control their debt, the people attending Debtors Anonymous meetings are in many ways no different from millions of Americans for whom debt is a way of life. Last July, Americans took out $5.38 billion more in consumer debt than they paid off, bringing the total consumer debt at that time to $573 billion, the Federal Reserve reported.

Loss of Control

Judging by the stories of people attending the meetings, however, debt is a more critical problem for them. They told how their inability to control spending has become a primary, paralyzing focus of their lives, causing them to lose sleep, self-esteem, family and friends.

Many said they have compulsive personalities, which have caused them to drink excessively, gamble or overeat, as well as overspend.

Robert, 58, an art dealer, who regularly attends the Reseda Debtors Anonymous meeting, marveled at how easy it was to get credit even after he had run up a $50,000 debt charging clothing, artwork, trips and extravagant dinners at La Serre and Le St. Germaine.

Drinking and debt caused Robert to lose his wife, two children, a three-bedroom hilltop Studio City home, two Mercedes-Benz automobiles and a successful advertising-film production company whose clients included Goodyear, 7-Up and Aunt Jemima pancake mix, he said.

‘I Wouldn’t Sleep’

“My life style hadn’t changed, but my income had,” Robert said. “I would spend money thinking I was going to get fantastic jobs, which never materialized. At the end of the month, I’d have all these bills to pay and nothing to pay it with. I’d wake up thinking, ‘How am I gonna pay this, how am I gonna pay that?’ Or I wouldn’t sleep at night.”

Finally, fearing that debts would cause him to resume drinking, he joined Debtors Anonymous. Today, he has cut his debt in half and owns a three-bedroom condominium in Studio City.

Those who come to Debtors Anonymous have debts ranging from a few thousand dollars or less to a half a million dollars or more. They could be the people living next door or sitting at the next desk at work. They come from all walks of life and all socioeconomic levels. Many suffer from anxiety, depression, sleeplessness and other problems and are being hounded by angry creditors, said Emily (not her real name), a media coordinator for Debtors Anonymous locally.

Members range from people who use charge cards to pamper themselves with purchases that they can’t afford to compulsive shoppers who cannot enter a store without buying something, said Gwendolyn, (not her real name), a longtime Debtors Anonymous member.

Some shirk fiscal responsibilities such as rent and medical bills while making frivolous purchases in “an attempt to fill up the empty spaces within themselves,” she said.

“The thing about using charge cards is, there’s no reality to it,” said a 41-year-old account executive who has been in Debtors Anonymous almost two years and is working to pay off his debts. “You’re not conscious about how much money you need to have to pay for things. You can go into a department store at Christmastime with $5 in your pocket and walk out with $1,000 worth of stuff.”

Strategies for Coping

Compulsive debtors adopt numerous ploys that allow them to skirt the edge of disaster while racking up debt. Some people use cash advances from one credit card to pay off another charge card. Some resort to writing checks for which there are insufficient funds or sending the gas bill to the electric company, as if by accident, to gain more time. Some people buy items on credit, returning them for cash that they use to pay overdue bills or to buy other things. The more desperate steal things and return them for cash, Gwendolyn said.

A debt-plagued member of Alcoholics Anonymous (AA) started Debtors Anonymous 12 years in New York City. A New York Debtors Anonymous member moved to Beverly Hills three years ago, bringing the program along.

Starting with one small, sparsely attended meeting, the Los Angeles Debtors Anonymous program has grown to 15 different meetings, at least two every night of the week. In addition to Reseda, groups meet in Beverly Hills, Santa Monica, South Laguna, Buena Park, Redondo Beach, Garden Grove, Culver City and West Hollywood.

International Reach

Today, there are also chapters in San Diego, San Francisco and other California locations and in cities such as Chicago, Washington, Miami and Paris, Emily said. No one knows how many members there are.

Debtors Anonymous draws heavily from AA, with its emphasis on anonymity and reliance on a “higher power.” Debtors Anonymous members study AA literature, substituting the words compulsive debt for alcohol.

In AA fashion, participants are encouraged to stop incurring unsecured debt “one day at a time.” (Debtors Anonymous does not object to debt that is backed up by some form of collateral, such as a car or a house.)

The tendency to incur debt is viewed as a progressive disease that cannot be cured but can be arrested.

The organization is self-supported. A basket for contributions is passed at the end of meetings. Since the Reseda church refuses to accept money for the group’s weekly use of its rectory, members donate food to the church. (To fail to pay would be incurring debt, one member explained.)

Meetings open with a prayer and first-name-only introductions. Every time a person speaks, he or she is greeted and rewarded with applause. After a short talk by the guest speaker, the floor is opened for “sharing,” a time when members can vent feelings of frustration, anger, fear or self-hatred; seek advice, or simply talk about anything.

Specific Steps

Debtors Anonymous recommends that people take specific steps. Newcomers are given a sponsor and a list of members’ telephone numbers, which they are encouraged to call day or night for help, particularly before and after taking tough steps such as finding a job or calling a creditor.

They are advised to regularly attend Debtors Anonymous meetings and to keep track of all debts and expenditures, even small ones like a nickel used in a parking meter or a cup of coffee.

After attending several meetings, the new member is advised to form a “pressure group,” (to relieve, not cause, pressure) with two experienced, solvent Debtors Anonymous members who help formulate a budget and debt-repayment plan, allocated in proportion to what is owed to each creditor.

Debtors Anonymous members are advised to write or call their creditors and work out a payment schedule. One woman who did so said, “The responses blew my mind. I got five or six companies saying, ‘We’re so happy you’re trying to better yourself.’ They were very understanding.”

Paying Off Debts

Debtors Anonymous does not necessarily advocate paying off debts as quickly as possible. Debtors are often advised to postpone payments for three months and then pay debts in small increments.

“When I had my first pressure group, the people in my group demanded that I go have a manicure and declare a three-month moratorium,” Emily said. “Because when we don’t take care of ourselves first and feel good, we don’t have a lot to contribute to the world.”

Debtors Anonymous strongly discourages filing for bankruptcy because it believes that people who do so return to their old habits and continue to pile up even greater debts. Besides, the group’s brochure says, “Repaying our debts is making amends for our past behavior.”

Emily, 32, remembered having a “ceremonial credit-card burning” the first week she joined Debtors Anonymous “at home, on the patio, with just me and God. I took all my credit cards and put them in the hibachi, took a match and said, ‘So long, trouble.’ It was really a release, but it was also scary.”

Steps Toward Normality

Today, Emily has halved her $5,000 debt and is slowly paying back her creditors. She and her fiance are buying a house in Valencia.

Emily said she has stopped being “isolated, an introvert . . . safely sitting at home by myself with the doors closed and locked, Twinkie in hand, making excursions out to the mall looking for something to make me feel good.”

“Now I’m out there, I’m doing things, I’m involved, I participate, I have people that love me and care about me, and all that good stuff. I feel like I belong. I still have a lot to learn. But I’m learning more about myself all the time.”