When his debts topped £40,000, Michael Love could no longer hide his head in the sand. He speaks to Andy Rea. Michael Love lost his job, his girlfriend and his lifestyle when his debts spiralled out of control.Every visit to the petrol station, supermarket or shops caused a wave of fear to flow over him that his card would be rejected in front of everybody.
His bills, bank charges and credit card and loan repayments took almost every penny he had - at one point he had just £10 a week to live on and out of that had to buy petrol and food.
But as he borrowed more and more money he was being crippled by the rising repayments.
Christmas presents were a luxury he dreamed of one day being able to afford again - and now that time has arrived after a four-year battle against his endless debts.
The 33-year-old buried his head in the sand until he owed £40,000 but then realised things were only going to get more out of control unless he woke up.
Had he continued to ignore the problem things would be much worse.
And for those in a similar situation, the third interest rate rise since August announced recently, was far from welcome news.
Redundant
But Michael, of Woodcock Gardens, Featherstone, has turned things around and today shares his story in the hope of helping others who are in dire straits.
The key factor in paying off his debts was fear - but not his own. He used his creditors’ fears that they would not see their money to transform his bank balance.
He threatened to register as bankrupt to get his creditors to agree to a deal for him to pay back only a third of the debt he owed, which will take him the next five years.
Michael, who provides IT support for an internet company, split up from his girlfriend in 2002 which left him with all the household bills of £1,000.
He was made redundant and soon built up £5,000 on credit cards despite trying to be sensible with his spending. The rest was from his overdraft and bank loans.
“The company I worked for got into trouble and my pay checks bounced so I ended up owing the bank a hell of a lot of money.
“It just spiralled from there,” he says. “I started using credit cards and even when I got a job I was working to pay off my cards, bank loans and overdraft.”
Each month he paid £150 in bank charges and when he tried to speak to the bank for help, he claims they weren’t interested.
“It got to the stage where I was left with £40 a month after paying off my bills and my girlfriend was lending me money to buy petrol,” he adds.
“I just ignored it, closed my eyes and carried on blindly until I sat there one night and realised I couldn’t carry on doing it.”
Experts say Michael is one of a growing number of people to suffer from ‘debt denial’, because he refused to face up to the problem for many years.
Sufferers concoct elaborate ways to disguise the fact they have a serious debt - fooling not only themselves, but often their loved ones and friends, according to finance solution firm DebtMatters.
They can find themselves criticising footballers and celebrities for their uncontrollable spending habits to hide their own shame.
And they will display behaviour changes, as well as suffering from physical symptoms such as panic attacks, severe anxiety, depression and sleeplessness.
But after three months of managing his debt Michael says it was magical to buy Christmas presents for his family for the first time in three years.
Michael adds: “Now I have got money every month I can go out, and it was the first Christmas in three years that I’ve had money to buy presents.
Idea
“I am still getting used to the idea that I have got money. My advice is to wake up to yourself and not bury your head in the sand, like I did.”
Philippa Gee, investment director at Wolverhampton’s biggest financial advisors, Torquil Clark, says a “financial diet” was a good way to regain control of your finances.
“People need to keep on top of their spending and have a clear idea of the money coming in and going out,” she says.
“Setting a budget as low as possible for the first few weeks and sticking to it can ease the situation.”
“Nobody else is going to do this for you and it is so easy to borrow money these days as you are bombarded on all sides to spend money - so it’s up to you to say no, and face up to it.”
More than 11,000 calls from people in serious debt are taken each month by Debtmatters financial advisors and the average unsecured debt is around £38,000.
The firm’s top tell-tale signs for “debt denial” include hiding the post; choosing the shortest supermarket queue or offering to go late in the evening to buy groceries to avoid embarrassment of cards being refused; never answering the phone; showing frustration when seeing a celebrity being snapped on a shopping binge; redirecting mail; going to the ATM alone and making excuses not to see affluent friends or family members.
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