LOANTOWN BLUES

A subcultural study of
low-income indebtedness

Coinneach Shanks
 TABLE OF CONTENTS

CHAPTER 1. Setting the scene ...............................................................................6

1.1 Introduction....................................................................................................6
1.2 Extent of debt and responses to debt as a generalised problem.....................6
1.3 Loantown's housing estates, population and disadvantage ............................7
1.4 Welfare services in Loantown .......................................................................8
1.5 The response to indebtedness.........................................................................9
1.6 The study......................................................................................................10
1.7 The participants in the study ........................................................................12
1.8 Interview profiles .........................................................................................12
1.9 An overview of the participants..................................................................16
1.10 Terminology.................................................................................................19
1.11 Abbreviations...........................................................................................20
1.12 Summary of study ....................................................................................20
CHAPTER 2. Getting into debt .............................................................................25
2.1 Overview.....................................................................................................25
2.2 Introduction.................................................................................................25
2.3 Separation and desertion .............................................................................26
2.4 Family, children and setting up home.........................................................28
2.5 The 3 Cs - Communion, Confirmation and Christmas ...............................29
2.6 Children, shoes and school .........................................................................32
2.7 Ill health and disability................................................................................33
Budget Sheet “A” Staying Out of Debt............................................................34
Budget Sheet “B” Getting Into Debt ................................................................36
2.8 Inability to cope ..........................................................................................38
2.9 Conclusions.................................................................................................39
CHAPTER 3. Living in the dead zone: The world of career debt ..........................42
3.1 Overview.....................................................................................................42
3.2 Introduction.................................................................................................43
3.3 Unavoidable debt ........................................................................................43
3.4 Displacement borrowing.............................................................................45
3.5 Administering career debt...........................................................................47
Budget Sheet C: Managing Career Debt .........................................................48
3.6 Dealing with arrears: "The rent man never calls twice" ..............................51
3.8 Holding the payments back: Fear eats the soul............................................59
3.9 Dealing with help agencies .........................................................................61
3.10 Conclusions..............................................................................................63
CHAPTER 4. Getting out of debt ..........................................................................65
4.1 Overview.....................................................................................................65
4.3 Community activity: Getting out the house ................................................66
Budget Sheet D: Getting out of Debt................................................................67
4.4 The illuminative moment: Key events on the road to Damascus ................70
4.5 Experience of the Courts: "Here comes the judge" ....................................72
4.6 Credit Unions ..............................................................................................76
Budget Sheet “E”: Getting out of Debt............................................................79
4.7 Conclusions..................................................................................................81
CHAPTER 5. Community, conflict and the debt process......................................84
5.1 Overview......................................................................................................84

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 5.2 Community suspicion: fear and loathing in Loantown................................84
5.3 Keeping quiet: the sound of silence ............................................................87
5.4 Social blame and acknowledged debt .........................................................88
5.5 Towards a money advice service: The community solution........................89
5.6 Conclusions..................................................................................................93
CHAPTER 6. Debt and the Community Response................................................95
6.1 Overview.....................................................................................................95
6.2 Introduction..................................................................................................96
6.3 Debt workers: Breaking with tradition ........................................................96
6.5 Awareness and transformation..................................................................102
CHAPTER 7. General conclusions ......................................................................105

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Author's preface

"Life is short - and so is money" Bertolt Brecht

This study is an attempt to contribute to the struggle against one of the most pernicious
problems affecting ordinary people. It tries to engage directly with the lived experience
of some of those affected. The reason for such an approach is to tackle questions of
process. What is the dynamic of indebtedness? How do people become indebted? Once
indebted how do they survive? Is overcoming debt possible?

So I adopt a very specific orientation for the study; one which I see as way of penetrating
the mechanisms of indebtedness at street level, through accessing everyday experience.
In doing this I hope to clarify the situation facing community-based intervention
programmes. The orientation demands a great deal of attention to meanings and world-
view. It tries to see, not merely the point of view of the indebted people, but through
their eyes. This requires both identification and empathy with the subjects of the research
and I hope sincerely to have risen to the task. This also leads me to apologise in advance
for any of the statements of participants that give offence to those working with indebted
people. In defence, I have to remind readers that in order to reach our objectives, we
have to acknowledge and address both feelings and the way in which different groups
see the world.

The project relies on case studies, but I felt that presenting these individually would
obscure the factors, which link their common experiences. So I've tried to weave the
cases in a narrative that explicates the processes involved. Qualitative studies should
have a raw, cutting edge that is necessarily absent from quantitative surveys. I intended
to convey not only the horror, but also the quirks, the inventiveness and maybe even
some of the excitement of continually living in debt.

Chapter 1 attempts to establish the context within which indebtedness takes place.
Specifically addressing indebtedness within low income families living in peripheral
estates, I have tried to lay out the generality of debt within the variety of social problems
and responses existing in Loantown. The aims and objectives of the study are outlined
and the participants who contributed information are introduced. Finally, at the end of
this chapter I have summarised the main findings of the report.

Chapter 2 looks at the factors and forces that pitch those families, otherwise coping
with demands on income, into lives determined by borrowing. Here, various crises -
separation, ill health, unemployment and so on - are examined. Cultural factors too are
taken into account. In particular, I have made an attempt to locate both social pressure
and pleasure in relation to the celebration and ceremony associated with Confirmation,
Communion and Christmas.

Chapter 3 examines factors that consolidate debt, confirming those affected in a state of
career debt, where debt becomes the determining feature of their lives. It looks closely at
ways in which indebted households sustain themselves over lengthy periods through
creative debt management. Here, interactions with moneylenders, rent collectors and

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help agencies are examined. It is in this chapter that the isolating effect of indebtedness
and the resulting fearfulness is portrayed.

Chapter 4 looks at the ways in which people overcome indebtedness. The study
attempts to explain the process through which personal life experiences radically
increase the awareness and reflexivity of indebted people. Here a resulting change in
taken-for-granted meanings allow them to confront troubles. The study examines the
early stages of the special accounts scheme. This now helps indebted people to peg their
arrears payments at realistic levels, through dispersal of funds by the Credit Union.

Chapter 5 looks at community conflict. I argue here that dealing with indebtedness
demands an orientation, which supplements that of dealing with individual cases. So in
this chapter I try to describe the ways in which communities find themselves
systematically damaged by generalised indebtedness; where indebtedness is causing
deep-seated divisions in neighbourhoods and imposing real limitations on social
intervention.

In Chapter 6 I tackle the question of community response to indebtedness, and attempt

to offer a range of community development options that may serve to ameliorate some of
the difficulties facing the collectivity of indebted people. This chapter looks briefly at
successful "bottom-up" community strategies, and suggests that a wider awareness of the
social and economic context of debt assists in transforming the lives of marginalised
groups.

General conclusions are drawn in Chapter 7. Here I have outlined the most important
areas of concern and offer a generalised strategy for the future.

The world of debt is typified by suspicion, anxiety and pain. This is the inevitable
consequence of inequality and marginalisation. At the same time we should not be
blinded to the positive aspects of hospitality, love and care, determination and tenacity,
which exist in the hearts of Loantown's dispossessed. Therefore I would like personally
to extend a special thanks to those who participated in the study.

Confidentiality prevents naming those who so willingly gave me their time, opinions and
a small part of their lives. Without their frankness and generosity of spirit, this study
would be the poorer. And though I always explained the reasons for the study to
participants it is not surprising that some thought I might be able to help in some
concrete and immediate way. It frustrated me that I couldn't. Nevertheless, optimism and
a belief in the resourcefulness of people lead me to believe this study may contribute to a
change in their predicament. I wish all of the indebted community the courage they
already possess.

Coinneach Shanks

May 1994

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CHAPTER 1. Setting the scene

1.1 Introduction

This study looks at patterns of indebtedness in low-income families. Naturally, the

context within which this takes place is a product of the social and economic
development of Loantown and the West. The lives of families in the study are bound by
location - all the more because their commitments limit mobility, confining them to one
place. But although many of the families in this study are trapped in this way, Loantown
itself has been subject to considerable change. It has seen substantial economic and
social development both in its own right as a city and within the region.

The reality of indebtedness is riddled with contradictions and this chapter seeks to
describe the framework within which this occurs. It draws on several information
sources including a demographic outline of social exclusion in Loantown and a mid term
report on partnership working; It also tries to depict the town graphically such that
readers not familiar with the town might have some sense of place.

The indebted families depicted in this study are here firmly located as part of the overall
problem of structural unemployment within Ireland's labour market. Although Loantown
itself has as a result suffered greatly with an average of 21% long term unemployed, in
the estates that surround the city centre this figure increases to over 40%.1 Living at and
below the level of subsistence low-income families in the estates of Mayfield, South
Park, St Stephens and Westtown often find themselves unable to cope with frequent calls
upon their budgets. Every day they face the spectre of enforced borrowing - and the
consequences of mounting debt.

1.2 Extent of debt and responses to debt as a generalised problem

A recent report indicates that nearly 40% of long-term unemployed people have debts
that cause them serious difficulties. This is a section of the population that finds its
access to legitimate credit denied. It is estimated that three quarters have no bank
account and two thirds are not members of a Credit Union. We can envisage that those
living on low-income close to benefit levels would increase this figure. Together, these
groups find themselves subject to increasing housing and electricity arrears and are
driven to seek alternative sources of credit.

Within what conditions do so many people find themselves slipping into indebtedness?
Firstly, they live in what is for Ireland, a comparatively large city. With a population of
80,000, Loantown forms the administrative capital of the mid-west region. Loantown's
proximity to a provincial airport has brought it economic development and it has

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acquired the image of a high-tech economic growth area, close to technological parks
and nearby industrial estates.

But the development of the region has affected the labour force unevenly, and as the
professional and technical sector grew, so did the unskilled and manual sector decline.
Between 1971 and 1986 unemployment in Loantown increased by 240%. Even this
increase was unevenly distributed with suburban unemployment quadrupling. With
more than 10,000 on the unemployment register during 1992 (half of whom are long
term unemployed), unemployment was climbing by 4.5% per year. Areas of public
housing in Loantown are mainly by those in manual trades - a total of 70% compared
with 47% in the city. But they are not only more vulnerable to unemployment. These
localities too suffer from educational under-achievement with a quarter of the population
having left school before 15 compared to 12% for the city as a whole.

1.3 Loantown's housing estates, population and disadvantage

Primarily as a result of public spending cuts in the '80s, physical upkeep of housing
estates deteriorated. Long streets of physically similar houses now appear quiet and
deserted and an absence of parked cars reflects the low-income of residents (cars per
household in public housing stands at 0.25 per household compared to 0.6 in Loantown
City). The estates were designed for high levels of car ownership but residents became
forced to rely on public transport that they found basic, unreliable and expensive.

Many residents in employment chose to leave for the more affluent and accessible inner-
city areas, a dynamic influenced by tenant buy-out schemes. The house surrender value
of £5000 persuaded some 15% of tenants to move out of one estate alone, leaving a
mainly welfare-dependent population. The dependency of the estates is magnified by the
presence of a young population - in the quartile of wards dominated by public housing
more than one third of the population is under 15 years. The relationship between family
size and poverty has been well documented elsewhere. Suffice to say that the totals of
28% of families who have more than 4 children and 21% who are lone parent families,
suggest that these those living in the localities under study have a higher risk of poverty.

But to the outsider, Loantown can appear quite comfortable. At its core, the centre is
bustling, vibrant and studded with new shopping developments. In common with many
other European cities however, the peripheral housing estates present a grim picture of
decaying infrastructure, isolation and social exclusion. Whereas the city centre hosts new
shopping developments, busy taxi ranks, and the hustle and bustle of a major regional
capital, the periphery is bleak, colourless and depressing. Shops are few and telephone
boxes fewer. Iron grills and fences fortify community facilities.

Far from providing an environment of health and leisure opportunities, the proximity to
the countryside of the more distant estates enforces a feeling of remoteness. In the estates
nearer to the centre, trunk road systems designed for through traffic have much the same
effect. And although Loantown has an undeserved reputation for youth violence, fear of
crime is common on estates. In a study of St Mary parish, residents identified youth
behaviour as a major problem. It is within this context that Loantown's community

7
groups work to transform their neighbourhoods and it shapes the arena within which an
interventionist debt advice service operates.

1.4 Welfare services in Loantown

Indebted families in Loantown must necessarily engage with agencies that provide
services for low-income households that are typical of the target group in this study. The
area-based partnership itself provides a framework within which those agencies -
together with voluntary and community groups - deal with those who have become
indebted.

Most importantly for this study, the Health Board (popularly known as "The Clinic") is a
source of help for medical cardholders - nearly half the population of the city - who are
entitled to free General Practitioner service and prescriptions. Child social work services,
including community-based child-care services, are also part of the Board's remit. It is
also possible to approach the Health Board for single emergency payments, and hence it
provides an important focus for people who have become indebted. As a major welfare
provider, its concern over indebtedness and related problems gave rise both to its
initiative in conjunction with the Credit Union, and its development of the special
accounts scheme in conjunction with Area based partnership.

The Department for Social Welfare assists a range of client groups and individuals
within the city's 80,000 population. Through its figures for delivery of benefits we can
assess to some degree the nature and extent of social disadvantage in the city. In the year
previous to this study, the Department assisted the unemployed (6203 recipients), elderly
(4750 recipients), families in need (3461 recipients) and those affected by illness (2060
recipients). Representing a total of approximately 16.5 thousand cases, these figures are
likely to be underestimates. Based on an apportionment of county data, the figures may
not reflect the concentration of unemployment within the city itself.

State supplementary welfare allowances also give some idea of the extent of
disadvantage. In 1992 the scheme helped 925 households weekly, making a total of
50,000 payments per annum. This includes payments for basic, supplementary and
exceptional needs, clothing and footwear, schoolbooks and school meals. This must be
seen as partial since the Department of Education and the Loantown local authority also
assist school expenses. More generally, voluntary organisations - including Loantown
Social Service Centre and various charities - provide financial assistance to low-income
families and individuals.

Housing services form an important focus of this study and arrears for housing
comprises a significant share of total indebtedness in the city. Loantown Local authority,
the major authority for housing need, administers 3107 tenants and 2262 tenant-
purchasers. Of the tenants, nearly all are welfare dependent. But in a situation where
rents rise regularly, many were attracted to the tenant purchase scheme as a way of
pegging increases. As we can see from the study, some welfare-dependent families
continue to view mortgages (and mortgage arrears) as "rent".

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We have to acknowledge trends in service delivery and use. In particular, organisations
have tended to operate from a top-down perspective that grants little self-determination
to their users. Additionally, organisations overlap in function, whilst applying differing
eligibility. Beneficiaries can therefore lose out with one agency because they have
received help from another. Increasing demand has placed great pressure on welfare
agencies and although voluntary groups have tried to make up the shortfall, the upward
trend continues.

The response to indebtedness, embodying a strategy of partnership, sought to avoid this

top-down approach. At the core of the study therefore there is a strong commitment to
developing the kinds of community-based approaches privileged by the EU Poverty
Three programme.

1.5 The response to indebtedness

Within the situation of widespread debt, located in a general framework of disadvantage,

Loantown agencies began to respond with a variety of measures. As a major provider of
welfare services, the Health Board was the first to launch the formal scheme that was to
provide the basis of a more generalised approach to indebtedness. Its initial pilot scheme
in South Park, one of Loantown's peripheral estates, drew together the Credit Union, the
Health Board and voluntary organisations to tackle the problem. At the same time, the
Board became actively involved in the establishment of the new Loantown partnership.
Funded by the EU's Third Poverty Programme, this was to focus on integrated
development projects designed to bring together local groups and statutory agencies in
partnership - to tackle disadvantage, poverty and social exclusion.

Represented at board level within the area-based partnership it was logical for the Health
Board and the partnership to jointly extend the debt initiative. This proved a productive
combination that allowed both organisations to build on the success of the Health Board
scheme. Thus projects incorporated the knowledge and successful practice of both the
Health Board and the partnership’s network of community, voluntary and statutory
advice services. Importantly, this strategy aimed not only to tackle individual problems
but also to develop policy measures such as money-lending reform and low-income
credit options.

Now with joint responsibility, the Health Board and the partnership launched the special
accounts scheme. Here, as is outlined elsewhere in this study, those who had reached a
crisis stage in indebtedness could begin to manage their debts. Following interviews by
partnership or Health Board staff, such clients became able to bring repayments down to
a more ordered and manageable level. Through making a single sum payment on a
regular basis to the Credit Union for dispersal to creditors, responsibility for multi-
payments would be re-located.

Through this special accounts scheme, it was envisaged that:

(1) Fear and anxiety within the home would be reduced.

(2) The burden of debt would be lifted from the family - providing an example to the
children.

9
(3) Provision of support would help to give hope to families.
(4) Dignity, self-belief and independence would be restored to families.
(5) An option of low cost credit would be provided.

1.6 The study

As part of its strategy in tackling the problem, the area based partnership initiated this
study of indebted Loantown families. Its express function is to inform and guide the
activities of a new money advice service. But more generally it aims to provide
knowledge that will shape the overall response to difficulties faced by both individual
households and by the community itself.

Families, who owe money and now have difficulties in meeting repayments or paying
off arrears, provide the focus of the study. Through talking in detail to families we hope
to add to the existing body of information on the financial dimension of debt, by
revealing the process of debt - to cast some light on the everyday world of those living
with debt.

With the active participation of Loantown agencies some 20 families were selected for
interview - so that the range of participants in the study would be typical of those that
they encountered in their work. People with single and multi-debt problems are included
- housing and utility arrears, those who owe money to moneylenders, local shops - or
even to family and friends. Although a single refusal reduced the number of participants
to 19, an informal conversation on reasons for refusal is represented within the body of
the report.

The process of debt is the most important focus of this study. An information and advice
service needs not only to advise those people who already have debt problems but also to
help prevent this happening. And it needs to draw on the experience of those who have
overcome debt problems. So the study has been organised in a linear way - looking at
how people get into debt, live and cope with debt - and at those who have successfully
tackled debt.

This report presents an opportunity not only to examine in detail the process of debt, but
also to create a space in which people who have become indebted can speak for
themselves using their own words. The increasing volume of available material on
indebtedness tends to emphasise pressures on income, budget management and effects of
indebtedness. But the focus of our study on low-income families demonstrates a
dissonance between budgets and borrowing, which almost reaches the level of the
abstract. It is perhaps this world of "coping" - dealt with in the core of the report - with
which welfare professionals have to grapple the most. The point in time where people
become enmeshed into debt, where living and survival is only possible through debt, is
also the point where life seems at its most hopeless. Feelings of indebtedness are
characterised by depression and pessimism - thus those who most need advice and
support are often those least likely to seek it out.

The study therefore focuses at the level of the everyday - the experiences and feelings of
people living with debt. It looks at processes that are often taken for granted. It examines
the way in which people make sense of their difficulties and how they present these to

10
others. My emphasis on presentation of self is influenced by an interactionist
perspective. What people feel and think is important and the subject is privileged. But
the study goes beyond individual families. It acknowledges that people live within a
social framework - and therefore emphasises community and neighbourhood, both in
terms of the feelings of the study's participants and in terms of the effect of indebtedness
on community relations. To use a health analogy, a neighbourhood strategy may offer
solutions at the preventative level whereas counselling and money advice is often forced
to operate at the curative level.

In 1985, a study undertaken by the School of Advanced Urban Studies in Bristol looked
at the experience of five European cities similar to Boomtown. It identified forces of
differentiation, segmentation, segregation and marginalisation that separated out social
groups and reinforced disparities in employment, housing, access to services, living
conditions and power.

Different types of families and households have the opportunity to develop particular coping
strategies in the face of economic change. Some are able to exercise a large degree of choice ...
others are supported through a variety of European and state programmes ... Other households
(and areas) however are unable to adjust and are increasingly marginalised and isolated both in
terms of their socio-economic and their spatial position.

The authors suggested that this marginalisation would become a main focus of concern
in the 1990s. The EU's poverty programme, now in its third phase, focuses on social and
economic exclusion. Its current orientation replaces the terminology of "poverty" in an
attempt to build more comprehensive approach and permit a closer examination of the
processes that lead to exclusion. This report is concerned with a main consequence of
that marginalisation or social exclusion, and at the economic level takes seriously the
development of a centre-periphery polarisation that shapes indebtedness.

For advice workers this study may reflect some of their experiences and confirm what
they already know. No apology is necessary here since the corroboration or verification
of findings should lead to increased awareness. Penetrating the everyday world of
indebtedness may help to shape targeting of client group and daily practice. It should
also help determine the pitch or tone of the service. The study shows that attitudes
towards the Credit Union are influencing take-up of the current special accounts scheme.
These attitudes are shaped by the process of indebtedness, the array of social factors
operating at neighbourhood level.

Whereas studies of poverty focus on a generality of experience, many debt-related

studies have hitherto concentrated on the effects of debt on particular cases - often
isolated in a sea of otherwise financially stable neighbours. Thus programmatic demands
for social policy emerge, which orientate to the individual. By examining the way in
which debt affects a whole community we hope to pave the way for strategies that aim
for social change at neighbourhood as well as the policy level. The study therefore looks
at the deleterious effects on neighbourhoods and relationships between social groups,
and examines community solutions. The locus of the study at the level of the subject and
the everyday taken-for-granted world stresses understanding, in an attempt to feed this
back into practice.

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1.7 The participants in the study

This section attempts to paint an overall picture of the participants in the study.
Information from the study's 20 indebted people and their families is intended as typical
rather than as a representative sample. Nevertheless, the study's substantially qualitative
orientation does not preclude some quantification where it can shed some overall light
on the dimension of debt. Naturally the usual caution must be applied to such an
analysis.

Additionally, since cases are woven in a comparative and descriptive narrative through
the study, it was felt that the reader might require a reference point for individuals
mentioned in the text. Thus the following brief profiles serve as a reference point for the
reader.

1.8 Interview profiles

The necessity of maintaining confidentiality precludes exact descriptions of family

structure, socio-economic status, individual encounters, lest they be recognized in the
neighbourhoods or even localities of Loantown. The following information is therefore
deliberately non-specific - e.g. exact number of children, ages and so on. Names have
been changed, and housing estates remain anonymous.

1. Katrina is a lone parent with children at secondary school. Her indebtedness began
as a result of communion expenses. After borrowing without her husband's knowledge,
the problem was compounded when he left her. Although she feels that some debts are
outside her control she blames moneylenders for making borrowing too easy and the rent
collector for failing to call regularly. Although community work has helped her to cope
and to join the special accounts scheme, her continuing inability to make simple
purchases and the increasing shabbiness of her possessions makes her depressed. She
feels that indebtedness has brought tension with her children and provoked the stigma of
her neighbours.

2. Lone parent Linda started borrowing to pay for her husband's drink problem. Her
children are disturbed and have trouble with the police - problems that she attributes to
the atmosphere created by her husband and to her increasing debt. Clearing off ESB and
HP arrears through use of moneylenders has merely transferred her commitments and
borrowing from family and friends has left her acutely embarrassed. Currently under
medication for depression she feels lonely, isolated and cries a lot. Nevertheless, her
concern to "keep up appearances" led her to spend large amounts on her home,
compounding her debt enormously.

3. After a disastrous marriage marked by considerable domestic violence, Carol's

husband left her to carry joint debts. Her problems included rent and electricity arrears
and debt to moneylenders, family and friends. Now in a new relationship her partner is
unemployed and she continues to face difficulties. Because of her debts, Carol continues
to feel anxiety about answering the door and the trauma of her first relationship requires
ongoing therapy. Although a community-based course opened the door to the special
accounts scheme she has recently received a new court summons for failure to pay the
TV licence, and is pessimistic about the future.

12
4. After leaving work to have a child Margaret was forced to borrow to finance her
husband's drinking. As a result of this problem and the stress of subsequent debt, her
children experienced psychological problems, and she made a suicide attempt. She
blames moneylenders for exerting too much pressure and used to hide from them when
they came to collect. Through a community employment project she came into contact
with the special accounts scheme. Her debts are now under control and she feels
confident about the future.

5. Christine and William ran into difficulties when Christine's pregnancy led to an
unexpectedly lengthy confinement. Expenses for Communion, Confirmation and
Christmas led to further debt through money-lending accounts. They were unable to
meet payments of electricity, gas and phone bills and their electricity supply was cut off.
Now the health problems that prevent William working have been exacerbated by his
worry concerning debts. After an approach to a charity, both Christine and William were
aggrieved about what they saw as insulting treatment and feel that they have been treated
differently from others in their neighbourhood. Now on the special accounts scheme,
they feel relieved about not having to deal with their creditors personally.

6. Karen blames her own bad management for her indebtedness. Now in arrears for
housing and electricity she feels that her neighbours disapprove of her and is ashamed to
go out. Hiding from anyone who calls at her home has communicated stress to the
children. She found out about the special accounts scheme from a friend but did not
apply because she thought that her husband's employment would prevent her
participation.

7. The cost of a late and unexpected baby drew Deirdre and Patrick into debt.
Deirdre had been borrowing without her husband’s knowledge, sending him out of the
house on errands when the moneylender was due. Subsequently all the family was
hiding from the moneylender, placing everyone under considerable stress. Feeling
vulnerable following the eviction of a relative from her Local authority house, Deirdre
sought help from a friend. Through her advice she is now part of the special accounts
scheme.

8. Theresa came from a family in which it was customary to borrow from

moneylenders. With a husband unemployed through ill-health and a late baby on the
way, she felt she had no option but to borrow from a moneylender. The stress affected
her health, for which she received medication. She was introduced to the special
accounts scheme by a friend and is now optimistic about the future.

9. Now widowed, Frances suffers from the after-effects of an old injury. Her
problems started with delays in transferring benefit entitlement. Poor living conditions -
bad insulation and a house continually attacked by vandals - have exacerbated her
money problems. She relies on small jobs from her family to provide her with the
occasional bag of coal or cast-off clothing. She cleared her money-lending accounts after
the threat of violence from a collector, but still has difficulties making ends meet.
Critical of the Health Board and the rent collector whom she finds "moralistic", she has a
pragmatic approach to bills that she keeps until "critical". She then pays them by holding
another bill back.

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10. Sean's family currently cares for a handicapped relative and confines itself to one
room to save heating. Difficulties began after moving house, when related expenses and
problems in benefit transfer forced Sean to approach a moneylender. Now administering
a series of accounts not only in his own name, but also in those of the rest of his family,
stress has caused him a nervous breakdown. His arrears include milk and coal bills and
his cable TV has been terminated. Despite the complexity of his debt Sean prefers to
clear utility bills by generating further money-lending accounts. His outlook is
pessimistic and he forecasts that Christmas and Communion expenses will double his
debt.

11. Liam's problems began with a delay in benefit transfer following an accident that
made him unemployed. This was exacerbated by a heavy fine that he could only pay by
using either licensed or licensed moneylenders. Although his mother helped him pay off
one account, he is in considerable difficulty and has been attacked by one of his
creditors. Suffering periods of mental illness has threatened his relationship with his wife
and he has made two suicide attempts. He is generally pessimistic about the future and is
cynical about community schemes since his experiences lead him to believe that others
less deserving are more successful in obtaining benefits. Now under notice of electricity
cut-off and eviction he feels a need for professional advocacy on his behalf.

12. After her separation Sheila had difficulties in paying bills, and blames this on her
own inexperience. Now she uses any one of three different moneylenders to clear utility
arrears, and forecasts that she will generate another account for Christmas. Her father's
help in looking after one of her children allows her to do a small part-time job but now
she owes him money too. The pressure of being unable to pay her various moneylenders
and keep up with bills has driven her to a suicide attempt, and her son was so badly
affected that he chopped up the furniture. Sheila won't consider joining the special
accounts scheme because it would prevent her organising another loan to see her through
Christmas.

13. Living with an unemployed husband and 4 children, Lisa's debts have reached a
critical stage. She has several accounts with moneylenders but they are so much in
default that they will now only supply her with goods rather than cash - so now she
obtains goods on credit and resells them to pay bills. Her neighbour has been paying Lisa
cash weekly to obtain goods for Christmas through one of her accounts - but Lisa has
spent the money and doesn't know how she is going to cover it. Her electricity supply
has been terminated 5 times and her housing arrears are continually mounting - a
situation, which she blames on the failure of the rent collector to call. With additional
arrears for coal, cable TV and HP her personal outlook is bleak.

14. Ann's problems began with her husband's drinking and often she would be beaten
if she failed to come up with the cash to finance it. Subsequent trouble between her sons
and the police, which she blames on the stressful and violent domestic atmosphere,
exacerbated money difficulties. When her front room was gutted by fire she held back
rent until repairs, using the cash to reduce money-lending accounts. As a result she now
has substantial housing arrears. Nevertheless, Ann believes that she will somehow
straighten out her financial affairs, but would prefer an agency to negotiate on her behalf.

15. After a difficult confinement Dolores gave birth to a child with a congenital
disorder, putting a strain on the family that led to separation. Her husband subsequently

14
died and despite the split, she bore the cost of her husband's funeral, consolidating her
indebted position. She now finds herself unable to cope, suffers physical and mental ill
health and is currently under medication for depression. She feels uncomfortable with
the idea of advice and feels she needs support to help her access advice services.

16. With finances that balance on a knife-edge, Thelma is living on the very edge of
indebtedness. Despite having a husband and daughters in work she has a severely
handicapped son and heavy expenses of care. Although she was the only person in this
study who has access to a car, a necessity in her case, this only served to place an
additional burden on the family economy. She lives in fear of her daughters leaving
home since it is only through their contribution that she can service her Credit Union
debt for housing adaptations. She feels that advice should be independent, private and
not administered locally.

17. Sarah says her debt problems began with financing Christmas for the family. Now
she can't remember when she last paid the rent. With her husband unemployed, housing
arrears amounting to £2500 and enduring violent threats from her moneylenders, she has
lost weight, developed chest problems and suffers from eczema. As a result of her
financial and health difficulties her children have not been to school for a whole term.
Now threatened with eviction Sarah hopes that her application to the special accounts
scheme will rescue her.

18. With mounting rent arrears, a husband who has been made redundant and continual
pressure from her children for clothes and schoolbooks Moira feels unable to cope. Her
husband blames her for their son's refusal to go to school whilst she feels it is caused by
domestic stress. She says she is terrified of the Housing Local authority and thinks that
everyone in the neighbourhood is pointing her out. Moira feels that the Government is to
blame for failing to provide an adequate income for everyone and that information on
the problems of debt should be more widely available.

19. Kathleen feels that the ever-increasing expenses of children growing up caused her
debts. She now finds herself unable to pay what she owes to her neighbourhood grocery
store and can no longer shop locally. Although she survived an eviction order through
the partial contribution of a local charity, she could not keep up the increased housing
payments she negotiated in court. Now, two years later, she is threatened with eviction
once again and has substantial electricity arrears. Kathleen admits that she cannot cope
and is unable to envisage a solution.

20. Paula and Marcus are in multiple debt and have asked for assistance in clearing
that which they owe. After two unsuccessful visits the interview was abandoned since
they decided they no longer wished to take part. The two conversations that took place
indicated that they could only focus on strategies that involved third parties taking
responsibility for their debt. Once they had established that taking part would not
directly assist them, they were unwilling to participate.

15
1.9 An overview of the participants

A quarter of interviewees were lone parents, all female. One was a single person living
alone. Remaining interviewees were two parent families. In all but two cases, women
provided the information. Only in one case did a male solely provide information, and in
another the male was the lead interviewee in a family group.

Family size clearly has an affect on living standards. Walsh's study states that families
with children have a 23% risk of poverty, compared with 13% for non-child households.
This rises to 29-35% for lone-parent and larger families. Family size ranged between 2
and 6 children. Although this averages as 3.6 children per family we can see that just
under half the group had four or more children.

Table I : Family size

No. of children 2 3 4 5 6

Lone parent 2 1 - 3 -

Two parent 3 3 3 2 1

N = 18

Most families were living in accommodation rented from the local authority. The
remainder had bought their Local authority house but had done so instrumentally to
"peg" the rent. As such they tended to regard their payments as rent. This was
consolidated by the fact that local authority rent collectors also collect mortgage
payments.

All of the respondents were typified by low-income - whether benefit or employment or

a combination.

Over one third of families were unemployed, with a further 4 participating on state

Table II : Employment of respondents

Employment

Unemployed 8
State scheme 4
In full time work 3
In part time work 3
Informal economy 1

N = 19

16
schemes. Respondents on state schemes were not confident about subsequent
employment and hence these two categories could be grouped to provide a total of 12,
nearly two thirds of the whole group.

Almost everyone in the study either had or used to have loans from moneylenders. Two
had cleared their accounts with moneylenders and 3 are now paid through the special
accounts scheme. No one with existing money-lending accounts was up to date with
payments.

The onset of indebtedness was treated differently from the participants' apportionment of
blame for the problem. Respondents were asked to trace the beginning of indebtedness
and in general identified the point where things first became unmanageable.

Table III : Reasons for becoming indebted

Expenses of Christmas, Confirmation, 7

Communion, weddings or funerals

Delay in benefit payment due to 6

moving house, separation or
disability

Pregnancy and childbirth including 5

unexpected hospital confinement

Just couldn't cope with expenses 5

Husband's or child's ill health 3

Husband's drink problem 3

Expenses associated with courts 2

N = 19

The largest single explanation is associated with events, mostly seen as inescapable, in
which the family is obliged by custom to participate. Commitment to children is
important here as the study will go on to examine in depth. Expenses of pregnancy,
particularly late and unexpected ones - and confinement after childbirth constituted a
quarter of cases.

Delay in receiving benefit after a house move, onset of disability or after marital
separation accounted for nearly a third of cases. A quarter of respondents just couldn't
cope with expenses on their level of income and this category includes those who
mentioned increasing expenses associated with children and inflation.

17
Table IV : Current creditors

Money-lenders 15
Local authority (rent/mortgage) 14
Electricity Supply Board 9
Credit Union 7
Family/friends 6
Shop 3
HP 2
Coal 1
Solicitor 1

N = 19 (includes those now paying through the special accounts scheme)

More than two thirds of cases were in arrears to moneylenders and to the local authority
for rent. The Electricity Supply Board constitutes the third largest group of creditors.
Importantly for this study, more than one third had already borrowed from the Credit
Union, although one family in this group was up to date with payments.

Health - particularly mental health - was in general poor. Nearly two thirds (13) of the
cases mentioned depression. A total of 8 of these were under medication of some kind
and 4 had made suicide attempts. Almost all respondents mentioned the effect of
domestic stress on their children, but in 5 cases children had become seriously disturbed
or were refusing school.

Most respondents could identify the circumstances within which they became indebted.
When asked if they blamed anyone or anything for their situation a different set of
responses emerged (some respondents gave more than one reason).

Table V : Allocation of blame for indebtedness

Self 5
Ease of Obtaining a loan 5
Government/economic policy 3
Partner's fault 3
Children 3
Other 3

N = 19

Although roughly a quarter blamed themselves for poor personal management, few were
prepared to shoulder total responsibility. "Moneylenders make it too easy" was a typical
response. A few identified the Government in some way, in terms of policy regarding
the benefit system or employment strategy. Cases involving a partner's drinking - usually

18
associated with domestic violence - were sufficiently strong for blame to be apportioned
at a personal level. The financial pressure of children's expenses also makes an impact
here.

In general there was little difference between the family economies of those on benefit or
those where a partner was in full-time work and despite the small number of cases, no
particular variations in patterns of indebtedness emerged.

Caution must be observed with all these groupings since obviously the level of selection
structured the set of interviewees. Nevertheless it is interesting to note that the shape of
information is similar to that collected by Walsh and Daly and others. Hence we can
positively conjecture a recurring replicability in results.

We therefore encounter a group of cases typified by low-income and who are for the
most part welfare-dependent. In all cases they are managing levels of debt with which
they cannot cope. Critical identification of reasons for personal indebtedness was
possible and results broadly match those of other studies. Effects of indebtedness were at
their most extreme in the area of mental health - particularly depression and suicide
attempts - and it must be recognised that indebtedness can form part of a multiple
"bundle" of problems that appears insurmountable.

1.10 Terminology

This study strives to take the words and language, which people use, extremely
seriously. In so doing a heavy onus to explain terms falls upon the presentation of this
report. In order to promote clarity and to avoid the clumsy formulation of she/he, the
following conventions have been used.

1. Because those who bear the brunt of living with debt and take responsibility for its
management are generally women, indebted people are generally (although not
always) represented as "she".

2. Money-lenders, rent collectors and so on are for the most part men and are referred
to as "he".

3. People looking after children alone are referred to as lone parents. However where
participants in the study referred to "single parents" this formulation has been
retained.

3. Informal economy replaces black economy, black work or "the lump".

As already mentioned, the sensitivity of the subject demands a particularly serious

approach to confidentiality. Thus names, locations, and some family details have been
altered in a way that does not substantially affect findings. Some information however
has been omitted, since it too clearly identifies the participants. The author is drawn to
the naturalistic use of exact words of participants but ironically the quantity and richness
of the material forces some abbreviation and consolidation. In so doing I have attempted
to represent the spirit of discussions, whilst clarifying the original text.

19
Within quotations, phrases in brackets indicate an added clarification, whilst (...)
indicates a transcription edit.

1.11 Abbreviations

CIC Citizens Information Centre

CU Credit Union

ESB Electricity Supply Board

EU European Union

FAS Fora Aiseanna Saothair - The Training and Employment Agency

HP Hire Purchase

SVDP St. Vincent de Paul (charity organisation)

TD Teachtai Dala - Member of Parliament

1.12 Summary of study

(i) Where debt is the product of structural unemployment, low-income and poverty, it
becomes an all-embracing system within which people negotiate and determine new
social relationships. Where the dividing line between "borrowing" and "indebtedness" is
very thin, periodic emergencies can very quickly pitch an individual or family into
indebtedness, into a path of career debt. Once it commences, people find it difficult to
influence the debt process without the help of others. Advice agencies find themselves
tackling the process at a late stage when crisis produces self-referral or referral by an
agency.

(ii) This study looks at the process historically - following cases sequentially as the debt
process takes place. It examines the stages - getting into debt, managing debt and getting
out of debt - in succession, to illustrate that the process isn't fixed and that it is possible
to tackle it at the level of social intervention. It takes the view that the process is very
much a social one. Rather more than budget management on a low-income, this process
represents a complex negotiation of social relationships that can limit the effectiveness
of advice and counselling. Moreover, the damage to people who become indebted is not
limited to individuals and families. Sustained damage to communities affects the
framework within which debt advice and counselling takes place.

(iii) The start of the debt process is centred in the family. The emergencies that prompt
borrowing are typified by separation, unexpected pregnancy, difficult confinements,
childbirth in quick succession, expenses incurred in Confirmation/Communion and

20
education. Ill health and handicap are often child-related. In addition, leaving work
because of ill health in the home also creates the conditions for indebtedness.

(iv) Expenses associated with a move to a new house shape borrowing patterns and
consolidate debt. Social isolation follows, forcing the focus of the family inwards. An
amplification of this process takes place as celebration within the family became more
important. Here Christmas joins Communion and Confirmation in influencing
borrowing. But cause and effect are difficult to extricate. Whereas ill health causes debt,
it is also the result of debt. Anxiety and depression, in turn, influence marital
relationships, and tensions within households result in behavioural problems of children
and young people.

(v) This is not to say that only emergencies cause debt. There are those who merely
find coping on a limited budget impossible. They are unable to identify any single factor
that leads to debt, but tend to attribute the high cost of children's clothing as a
conditioning factor in its intensification. Coping with the demands of education-related
spending is consistently mentioned throughout interviews.

(vi) Once in debt, it becomes impossible to meet payments. This part of the process,
described as career debt, is typified by coping strategies. The indebted individual or
family is continually forced to raise loans to meet lump sum commitments like the
electricity bill or expensive items of clothing. As payments increase, the less flexibility
they have to manage this system. Adaptations to the system include allowing the
accumulation of arrears, then settling them with a loan from the money-lending market.
Pressing creditors force the indebted family to raise other loans to pay for them. This
part of the debt process enforces a sophisticated system of extending re-payment periods,
often to more than triple that of the original agreement. It is a system of some
complexity, where the indebted person instinctively judges how much non-payment
creditors will tolerate. Through testing the system to its limits, indebted persons reach a
crisis stage. This can take the form of eviction, threat of violence from unlicensed
moneylenders or ill health. Anxiety, depression and suicide attempts are typical of this
stage. It is this stage (or shortly before), which is more likely to produce debt-counselling
referrals.

(vii) During career debt, new relationships are formed, as the social milieu of indebted
people contracts and changes. Debt and its management becomes the dominant feature
of life. At this stage the drive to secure additional income becomes more intense, and the
study notes the tendency for the Credit Union to become enmeshed in borrowing
patterns. This has severe implications for the success of the Special Accounts
indebtedness programme. Those still in debt to the Credit Union feel that the scheme is
closed to them, whilst others cannot face the financial commitment of saving for the
required qualifying period.

(viii) Both the social benefit system and voluntary social welfare organisations become
subject to the debt process. With marginal flexibility for cash injections, families rely on
cash or kind benefits in the form of emergency payments. Much conflict arises from the
perceived arbitrary nature and unfairness of the system. The stereotypical views of those
who see others successfully negotiating payments, distort relationships within the
community. Agencies do not appear to be immune from these stereotypes and the study
notes that the less articulate seem more likely to be recipients of charity donations. In

21
contradistinction indebted families perceive themselves as respectable; as having
standards below that they would not sink. Refusing to play the system as they see it, they
integrate welfare and charity rejections into a social explanation for their continuing
indebtedness.

(ix) Agencies suffer during this period. As isolation confines social activity to the home,
violation of the indebted person's private space sharpens doorstep exchanges. In
particular the rent collectors suffers through a combination of lack of sensitivity and
increased tenant hostility. Comments on household acquisitions glimpsed through the
door increase the propensity for the door to stay closed. This situation is alleviated in
some cases through removing collection points to social facilities and increasing visits to
coincide with benefit payments. Relationship with the ESB is subject to the same factors
and its power to cut off electricity with ease is much feared.

(x) Priorities within payments systems are generally food and lights. But interference
from outside the indebted persons' priority system can quickly change this. Interference
from the courts and from violence (or its threat) are evident. If a creditor is particularly
pressing, this results in an inequitable distribution of available funds and health damage
to the family. Increased money-lending debts often follow the threat of eviction, fines or
unrealistic arrangements for arrears repayment. Participants confident enough to make
arrangements find that they break down after a short while, but also recognise that, if
they make the effort to keep paying something, then they are left alone.

(xi) Money-lenders play an ambiguous role within the community. Evidence suggests
that although there is a clear difference between licensed and unlicensed moneylenders,
that there is unevenness in the system. Top-up loans in particular, enmeshes families in
further and disproportionate debt - but they are easier to obtain. The drive to secure that
small flexibility in income leads borrowers to negotiate ineffectively. The study detects a
difference between national/regional companies and more locally based unlicensed
moneylenders. In either case however, moneylenders are known on first name terms and
take on the status of household acquaintances. Moneylenders are always introduced by
friends, neighbours or family.

(xii) Observation with a money-lending collector reveals a capacity to remember the

family details of a large number of clients and visits are marked by conversation. Trust
plays a part in this relationship. Doors are left open and payments left under doormats or
even in drawers in unoccupied homes. This openness is typified by considerable honesty
when clients are unable to meet payments. This quickly breaks down where accounts go
badly out of order. Yet this can happen with one moneylender and not with another. In
general a borrower can judge when this is going to happen and manipulate a network of
different firms to maximise income.

(xiii) The study suggests that moneylender and community form a symbiotic
relationship. The indebted family needs the moneylender to satisfy emergency needs in
the form of small loans. The moneylender performs a "service" for the community. But
his doorstep proximity often leads him to have first call on monies. As a result the rent
gets left back, and as top-ups continue he diverts available finances away from the Local
authority. Thus public money flows into private hands and away from the community.
The study indicates that a more community-orientated collection strategy for Local
authority rent payments can partially stem this flow.

22
(xiv) The study looks at those who are in the process of overcoming debt - both those
who are now involved with the new special accounts scheme and those who, through
other methods, are tackling increasing indebtedness. People who have slipped into debt
and are unable to understand the process that now embraces them, are more likely to
have reached a crisis and been referred by an agency like the Local authority. Here, debt
counselling engages in a more difficult operation of rescue or damage limitation, e.g.
preventing eviction. Others were persuaded by their friends to seek help and often these
friends had been through a similar process. Some were prompted to review their
situation through accumulation of experience or a key event that allowed them to look
back critically. In the latter case, described as the illuminative moment, an observed
event, such as an eviction, allows the viewer to generalise to her own experience. In
other cases a remark by a child, indicating its fear of answering the door, unveiled the
effects of indebtedness. The realisation that events were out of control constituted the
cumulative moment. All of these give the impetus to seek help and support.

(xv) The re-integration of indebted people with a wider social milieu also brings about
change. Employment and other social schemes not only increase friendship and support
systems, but also expose the indebted person to information. In this way the indebted
person or family member increases opportunities to overcome debt. In breaking down
the isolation of indebted people, such courses also improve links within the community.
The success of this factor will depend on the ability of the person to maintain social
contact and on the capacity of the community sector to provide support systems on
conclusion of courses. Such schemes provide an important referral point for debt advice
and counselling.

(xvi) The courts represent a chance to help indebted people overcome debt, but neglect
the opportunity to so do. In agreeing to unrealistic arrangement requested by creditors
they confirm paths of career debt. Unrealistic fines are paid off with moneylenders, thus
intensifying indebtedness. Unorthodox methods of survival, which result in criminal
conviction and imprisonment contribute to family indebtedness, e.g. by applying a large
fine the court reduces the beneficial effect of a community service order. Participants are
not prepared for the publicity they receive in court and find themselves labelled as
"indebted" in the community.

(xvii) Those who took advantage of the new Special Accounts intervention, which takes
responsibility for payments, reducing them to a manageable level, proved extremely
successful. Participants experienced a strong sense of liberation and empowerment, and
exhibited both enthusiasm and optimism. Drawn in by recommendation and community
contact at neighbourhood level, they are now anxious to assist others in the same way.
The informal style and community-orientated approach is proving extremely effective
and closely matches the kind of service that indebted people want themselves. Some
indebted people wish to avoid being identified. Service delivery will have to
accommodate the demands of privacy and confidentiality, and ensure its compatibility
with a local approach.

(xviii) The study identifies a strong subcultural influence on indebted people typified by
a common network of money-access, language, values and world-view. In this case it
constitutes both strength and weakness. Its valorisation of the home contributes to its
isolation and minimises the effectiveness of debt services. Child-centred value patterns

23
increase the propensity for debt acquisition, and disavowal of social activities reduce
opportunities for support. Nevertheless it forms a coping strategy, which can be
sustained for many years. Its oppressed position forces it to critically examine the socio-
economic structure and it exhibits a clear understanding of the social dynamics of
money-lending. Its common experience could be of practical value in anti-debt
initiatives. In a sense it contains the seeds of its own salvation.

(xixx) The dynamics of neighbourhoods, however, are profoundly affected by suspicion

and the feeling of being under surveillance by neighbours. This is expressed in terms of a
rational assumption - they must know, it must be obvious. Combined with the feeling of
unfair treatment by welfare agencies, this produces an unsettled, uneasy existence within
communities that would otherwise be supportive. Declining housing stock and
deterioration of interior contents and resources are contributing to demoralisation at
neighbourhood level. The study nevertheless notes a high degree of community
commitment and looks at possibilities of reversing the process through community
involvement.

(xx) People express a desire to make a fresh start but would like an opportunity to repay
their debts. The study proposes an examination of community solutions, where at a
voluntary level arrears could be discharged through community-oriented work within
neighbourhoods. The study also examines the possibility of re-routing existing charitable
monies to resource facilities within the community. Based on the notion that seed-bed
funding creates disproportionately high achievements, it constitutes a value-for-money
option that should be examined. Such an option should primarily address the basic needs
of the community - amongst them provision of household necessities. The study
suggests that the partnership arrangements now in place provide a strong base for
community development at neighbourhood level, stressing participation and
involvement. As such it would provide for a reduction in the social exclusion affecting a
significant sector of the population.

(xxi) The study locates indebtedness in the overall framework of high unemployment.
A sizable surplus population is socially and economically excluded, its pathways into
the labour market restricted. The study notes the response of indebted people to their
social position as a subcultural one. In an alternative analysis to those that depict
indebted people as passive it sees innovative debt-management as an active coping
response - a collective subcultural adaptation that forms an imprecise but tenacious
resistance to social exclusion. As Robinson and Gregson point out, through the
acquisition of things that are valued in society it demonstrates a logic of self-interest
that subsumes the values of the wider (non-excluded) society.

24
CHAPTER 2. Getting into debt

2.1 Overview

This chapter sets out to examine ways in which low-income families become indebted.
By engaging with the process of indebtedness it identifies the causes that precipitate a
debt career - where individuals and families become bound into a system whose
existence is determined by the continuing need to borrow for everyday expenses. In this
respect it identifies marital separation, the pressure of providing for children, the burden
of school expenses and obligation and cultural expectation in relation to rites of passage
and of religion. It also distinguishes "unexpected" features such as late pregnancy and
the onset of illness or handicap, which often gives rise to interruptions in the flow of
benefits to the household. Here the study charts the pressure to resolve the crises through
limited available credit and locates both legal and illegal moneylending as being
instrumental in the path to ongoing indebtedness.

This part of the study notes the flow of available monies away from the community and
the local state and into essentially private non-local hands of finance entrepreneurs. It
suggests a review of administration and eligibility criteria for benefit payment and
recommends a consolidation of partnership of agencies; such that a rational co-
ordination might more rationally meet community need and retain funds within the
community.

2.2 Introduction

In the social world of Loantown's housing estates, there is little mystery about the nature
of debt and its causes. In general the participants in this study live on low-incomes -
usually state benefits. With no bank accounts and little choice of credit facilities their
level of income leaves no room for manoeuvre. So any departure from everyday
expenditure can prove catastrophic for families. This section is dominated by life-events
that might otherwise appear normal - births, deaths, marriages and separations.
Children's expenses present a continuing challenge to the economic system of the
household, where the three 'C's - Communion, Confirmation and Christmas - generate
crisis rather than celebration.

For women especially, separation has both an emotional and a financial impact. Death of
a partner leaves a legacy of funeral expenses with which the remaining partner finds
difficult to cope without borrowing. In both these cases difficulties and delays in changes
to an individual's social benefit creates a time fraught with extra expense, within which
borrowing provides the only means of survival. Difficulties associated with child bearing
constituted a major factor in the study as did ill health and handicap. Health difficulties
not only reduce income but entails extra expense. Mental health problems - alcoholism
and drink-related conditions particularly - can lead to borrowing; the pressure here often
falls on other members of the family.

25
Although participants are often able to identify a single cause for incurring debts, there
are cases where no simple causal factors apply. Sometimes a complex variety of factors
combine. In some instances people find themselves unable to cope with managing a tight
budget and cannot pinpoint any single event or sequence of events, which had led to
indebtedness. The consolidation of debt that results is examined in Chapter 3.

The results of the study suggest that there is a distinct difference between "career debt"
and "crisis debt". For many participants in this study, living with debt becomes a normal,
unavoidable phenomena where holding back payments for housing, electricity and
topping up small loans with private moneylenders is a way of survival for many families.
Some seem to have the capacity to extend this almost indefinitely and are trapped in a
pattern of career debt. Crisis debt involves a recognition or acknowledgement that their
private debt-management system will no longer cope. For those who are otherwise
managing, this is often typified by an additional and unexpected factor, such as
separation, unexpected pregnancy or ill health, but is more likely to be an external
factors such as a threatened eviction.

The implications for advice may be more difficult to establish for the beginning of the
process - at commencement of career debt. Nevertheless it is here we must start if we
are to estimate the scope for preventative work in the community. In this section we
examine both causal relationships and those where the relationship between debt and the
household is more complex. In addition we look at those cases where households have
slipped into debt within general rather than specific circumstances.

2.3 Separation and desertion

I have to cry sometimes to get along, Good Lord

I just can't hardly get along.
Can't hardly get along. Johnny Lewis

Where relationships founder, the financial pressure on either or both partners can be
considerable. Partners left with child-care responsibilities are in the most difficult
position. In this study female lone-parents identified the breakdown of the marriage as a
cause of debt, and debt as a contributing factor in separation. Here the causal elements of
debt and problems within the relationship intertwine to create a volatile and destructive
situation.

In Sheila's case, the break-up of her marriage led directly to borrowing. Her husband
had always taken responsibility for family finances so separation left her unprepared for
budgeting in her new role. Her husband's control of household finances allowed him to
remove any savings and left her in a vulnerable position.

When we split up my husband broke in and took any money and everything of value (that's
when I got into debt with my Dad). I just got deeper and deeper in. I had to start replacing
everything. (My husband) used to handle the bills and just give me house money so I hadn't a
clue what to do. When we split up I had three weeks rent still to pay and it just piled up until I
owed more than £200. So this loan shark came along and I got a loan from him.

26
Here, the pressure to pay rent resulted in the use of a moneylender to pay off arrears -
and this transference of debt proved to be a common theme linking almost all the cases
studied. Sheila's husband requested a separation agreement for which a solicitor was
engaged, but his failure to pay the fees left her with a further bill of £124 - resulting in
further borrowing from a moneylender. But whereas her husband leaving the family
home directly caused Sheila’s problems, most other separations were tied to debt in a
more complex way. For Katrina a marriage break-up served to consolidate increasing
borrowing and repayment difficulties. In common with several cases in the study she had
been borrowing without her husband's knowledge.

My marriage broke down and left me with more debt. The electricity (ESB) bill really hit me -
it’s substantial. I was on my own with 5 kids, trying to manage with the allowance and all
these bills coming at me. I didn't know how to cope without letting them go ... before we split
my husband coped with the ESB and the Credit Union. But he had no idea what it cost to
dress a child. So I was with moneylenders without his knowledge for Confirmation because
he never helped. I couldn't cope. I'd get £200 loans - up to £800 at one time. It went on for
years.

Here, an established practice of borrowing from moneylenders was located within a

relationship where neither partner knew the full extent of household outgoings. The
increased pressure of trying to cope with unfamiliar payments led to failure to pay the
electricity bill. Familiar with coping through borrowing from moneylenders Katrina
brought the ESB payments up to date through loans. But the monthly purchase of
children's clothes and shoes was only possible by continuing to mobilise further loans.
At this stage she felt the situation had gone out of control.

In the following two cases, moneylenders formed part of a daily existence prior to
separation. Ann, a mother of six, now living with 4 children in a local authority house, is
withholding her rent due to lack of maintenance and has arrears of £400. The threat of
domestic violence led to borrowing from moneylenders and eventual separation

I was borrowing money for drink for my husband. That's when it all started four and a half
years ago. If I didn't get it then I used to get a beating and everything. I often had to run up
and down the road looking for money for him ... I was debt free when he was barred from the
house.

Now paying £30 a week to three moneylenders from a lone-parents allowance of £120,
Ann blames her husband's violence not only for indebtedness but also for her son's
problems with the police. His imprisonment is now an additional financial pressure.

In a deteriorating relationship Linda's husband had retained most of his unemployment

benefit, forcing her to borrow from moneylenders to finance everyday expenditure. His
refusal to acknowledge the problems of budgeting persisted - despite being taken back
during a period of illness sometime after their initial separation.

The early years were all right - more than 20 years ago. So long. He would give me a certain
amount - he had his money even if it was dole money. But a lot of my problems come from
his drinking. When he went to the pub it would be £20 gone and I couldn't pay things. There
were moneylenders then, with debts in my name ... It was hard I tell you. Rent arrears too.
The kids were all at home and I'd find it hard to even dress them. Any extra shilling you got,
they were always needing shoes all of the time. The budgeting was all my business. "You got
your money. Do what you like with it and don't bother me - I don't want to know!" He'd sit and
say it was my fault I couldn't pay the bills.

27
With help from the FAS training allowance, which supplements her deserted wives
benefit, Linda is clawing her way out of debt and feels that her two children have
benefited from the removal of the threat of violence. Nevertheless she continues to live
with multi-debt to moneylenders and the Credit Union - and she still feels responsible for
outstanding repayments on her husband's £600 moneylending debt. Her story is typical
of those cases where the process of debt began during marriage - but was expressly tied
to the problems within the relationship that eventually led to its breakdown. The benefit-
dependent household is operating with little slack in its economic system. Without
cooperation and communication between adult partners even normal expenditure
continually needs supplementing through borrowing.

"When poverty comes in the door, love flies out the window". The old saw distils the
complexity of this problem to a causal relationship. In an examination of the relationship
between marital problems and default, Janet Ford's work on indebtedness1 draws
attention to the duality of this process. Where debt causes relationship problems and
relationship problems cause debt, a money advice agency has to place debt in context
and shape its approach to individual clients accordingly.

2.4 Family, children and setting up home

Expenses associated with children constitute a major theme of this study. Several
participants in the study could find no other reason for their debts than the general costs
of clothes, shoes and schoolbooks. Pregnancy itself can be an additional expense for a
family but where it takes the form of unexpected late pregnancy the financial pressure
can prove devastating. Moving to a different house creates a desire to "set up home".
The need to take possession of a house and make it one's own is part of the process of
coping with change - but can prove more expensive than is first imagined. When
participants were asked about what they lacked - but really needed - responses tended to
be couched in terms of decoration, floor coverings or basic furniture. In the two cases
that follow, living with debt began following a move into their new home. Setting up
home drew them to rely on moneylenders, to whom they were referred by acquaintances
in the neighbourhood. A crisis point was reached when both suffered unexpected late
pregnancies. Deirdre explains how this affected her.

We only moved in with an old bed, and a friend that I'd just got to know was telling me about
this credit man. And I got £600 to start me off, three and a half years ago -then got another
one ... but it all came to a head when I had the baby. I was taken off birth control and after 18
months I got caught. I had just got rid of the baby things and we had to start from scratch - so
I found it hard. I wasn't on top of things as it was and then he cost me £30 a week with food
and cream and things and you only get £15 a week (extra) on the Labour. I get paid on a
Monday and I literally have nothing left on Monday night - so I have to start borrowing on
Tuesday morning.

Theresa's story is similar. Accustomed to moneylenders during her childhood in a

workless family, it seemed "normal practice" to borrow to meet everyday expenses.
Thus her career debt commenced with a move to a new home where funds borrowed for
re-decoration were quickly sucked into household expenses.

28
 I can't remember living a life without moneylenders knocking on the door. In my mother's
house or down here it just carries on. I got this house 7 years ago - we didn't have nothing. A
woman down the road said that she could get me the loan of the £100. It went on wallpaper
and eventually just vanished with everything else. When I'd finished that, I'd take out another
hundred and carried on from there for 7 years. So you could be down to £20 repayments. I'd
say "Any chance of a loan of £100?" You deduct the £20 out of it and end up with £80 but
you still have to pay £127 to get £80 in your hand. There’s a big catch there! But this year I
had the baby I wasn't expecting. The baby things that had belonged to his brother I had
passed on and had to start all over. I borrowed £300 for a pram, clothes, nappies. I had been
going to finish but well, we're going to need (moneylenders) now - there's nowhere else to go
is there?

The process of debt here begins with the most basic of human needs. The importance of
the home led both of our participants to approach moneylenders to fund decoration or
furniture to start family life, and for both Deirdre and Theresa, living with debt became
commonplace. It was a key occurrence - a major crisis - that forced them to seek
alternatives. Both families were forced to address the implications of continuing expense
associated with another child.

After she was born I got to thinking. The eldest of mine now is coming up from his first Holy
Communion this year. I said "Oh God! Don't tell me I'm going to have to borrow a couple of
hundred off a docket man to see him through that". I said to John "It's '93 and here we are
starting off already. We're going to end up going to the moneylenders for May for
Communion. It's not on!"

For Lisa a move also proved too expensive for the family budget and an inability to cope
led directly to an approach to a moneylender. Top-up borrowing (whereby the lender
issues a new and larger loan incorporating the outstanding sum) has now built
repayments to more than £50 a week.

When I came here there wasn't any spare money. That's when the money lending came. A
friend of mine said I can get you someone that can give you a hundred pounds. Then it was a
hundred and a hundred and a hundred. I'd let it get down and then have another one to clear
the old one. Then you get into the shop because you can't pay your moneylenders.

Lisa's family now has multi-debt problems encompassing rent, electricity, coal, TV hire,
TV license and moneylending accounts. An inability to keep up with the rent means that
the family is forced to live in poor conditions. The house has severe damp problems,
which the local authority refuses to rectify unless the rent is brought up to date, a factor
common to several participants. The local authority comments that this is a circular
problem, which continually amplifies, holding that the financial impact continually
restricts its ability to provide an adequate repairs programme.

2.5 The 3 Cs - Communion, Confirmation and Christmas

Many studies of debt refer to the shrinking social world of the indebted person. For low-
income families the pleasure of setting up home turns in on itself and the home sets the
boundary of their lives. This will be examined in detail in the section "Living with debt".
It is also an important factor in the start of the debt process where isolation and
confinement in the home leads to a greater emphasis on ceremony. Life events marking

29
transition, rites of passage particularly those defining adulthood - here represented by
Communion and Confirmation - take on an increased significance. And in a situation
where the possibility of "having a good time" is severely limited, the pressure to enjoy
Christmas is almost unbearable.

These expenses were identified as a major financial pressure. Where children were close
to each other in age, the annual sequence of Communion and Confirmation expenses
proved responsible for a steep accumulation of debt. Christmas in particular marked a
period where parents in this study felt the stigma of low-income most severely - and it
emerges as one of the sharpest pressures in encouraging borrowing and accumulation of
housing and utility arrears. The study suggests that families living with debt construct
private debt-management strategies around the Christmas period, determining their
borrowing requirements and repayment strategies for the following year. Christmas for
one participant in the study was responsible for her feeling unable to cope. Sarah's
children's expenses could only be subsidised through borrowing from a moneylender.

It was Christmas that set it all off with the moneylender. The children were looking for this and
that and new clothes. That's how I started off. The original sum borrowed was £40. I paid
back £70. Then I had a new one for £40 or £30. He would give me a new loan but I had to
use it to pay off the other one. The moneylender is the main problem. I pay £120 a week to
pay him off and he adds interest all the time.

Despite rent arrears of £2,500 for which the family face eviction, Sarah feels that the
moneylender has become the major difficulty. Now in considerable ill health, which she
attributes to anxiety, she coughed continually throughout the interview. Sarah said that
she hadn't been eating so that she could pay off the moneylending debt. Similarly, Linda
took a similar route into moneylending via children's expenses during Confirmation,
Communion and Christmas.

Communion, Confirmation, Christmas. You know! The dressing of 4 teenagers is just

unbelievable. I've had a communion or a confirmation without a break for 9 years. They cause
an awful lot of heartbreak and a lot of borrowing. I have had 2 moneylenders and 2 accounts
with each one. One in my name and one in my husband's name - and he hasn't lived here for
6 years. But I took out a second loan in my husbands name with the same lender. So it was
four bills I was trying to cope with.

Ethno-centrism often leads us to deny the centrality of the ceremonial in comparison

with those of other cultures. But a comparison with more "traditional" societies reveals
the same process of indebtedness. Ceremonies "... indicate the passage from non-
existence to birth, from childhood to adolescence and parenthood, from life to death.
They are inescapable obligations ... carefully scrutinised by others ... jealously
comparing the cost, costumes or the food available for guests. Competition in
ceremonies is unavoidable and failure to live up to the current standard involves serious
loss of face and lasting shame." Whilst here Paul Harrison1 is referring to Asian
communities, it equally describes the pressures shaping indebtedness in Loantown's
peripheral estates. Resorting to debt is an international phenomenon where those who
lack resources are forced onto the loan shark market with its high rates of interest.

Christmas for Sean was (and remains) the most important time of the year. But it was a
combination of moving house and changing benefits, which drained his available
finances. Christmas and Communion started his debt problem - and the pressure of
subsequent Christmases has confirmed this process.

30
 When we moved here I had a claim that never came through for three weeks. We had a few
bob saved. I went to find out why it wasn't coming. I had been knocked off and hadn't even
been told. I went into the local TD and he told me there was nothing I could do - I lost 4 weeks
money by the time I found out they'd transferred me from one benefit to another. They said
you lived for the three weeks - what did you live on?

Sean is careful to emphasise his family responsibilities and despite a disability feels that
it is his duty alone to provide for the family. He ensures that rent and electricity are never
in arrears. He dislikes charity and is aware of his obligations to his creditors.
Nevertheless his experiences with the benefit system may have been responsible for a
strategic and manipulative approach to borrowing.

It was the pressure of Christmas 2 years ago. I thought about what a wonderful Christmas we
would have and go out and have a good time. Not for a drink - but to go into a shop. We had
no debts at the time. We weren't in arrears. It was great. But I thought - Christmas? A
thousand pounds? Incredible! So it was a great Christmas - and now it’s a great £30 a week!

Now in a position of multi-repayments to moneylenders totalling £63 per week,

accounting for a third of the total family income, Sean feels that the family can only
survive through borrowing. Again the financial pressure of ceremony is aggravated by
migration. Where members of the family have moved abroad (usually the UK) direct
communion expenses extend to travel.

Last summer I took a holiday and I borrowed a total of £600 off this fella under three separate
names. My son's grandmother couldn't come to his Communion - she had one of her own
children making a Communion. I said if she couldn't come we would take him over to her.
£300 to fly and £300 to spend. I had a great time. I didn't care. II went with this attitude. I was
paying this fella £30 a week and this one £36 a week so I thought, "I'll pay him one week and
won't pay the other week. The week I pay him I won't pay the other fella". It’s as easy as that.

Wages from occasional part-time work made repayments on Sean's first loan
manageable. The second loan was based on a manipulation of two debts, calculated on a
predicted acceptable level of default. Holding back alternate payments extended the loan
period, bought time and transferred part of the pressure back to the moneylender. But the
pressure of each subsequent Christmas remains. At the time of interview Sean fully
intended to obtain another loan for Christmas 1993. Here we begin to observe the
stretching of repayment periods to incorporate other loans, as borrowers impose their
own rules - up to the point that the system will stand.

The pressure on families through Confirmation and Communion expenses was a

common theme. But one of our participants drew a clear class distinction in
understanding this experience. With a husband and two daughters in employment,
Thelma is just able to cope financially with the expense of her severely handicapped
son. She lives in continual fear that a daughter will get married and leave the home,
disrupting a precarious financial balance.

In the poorer areas they have this fantasy. "My child has to be dressed". You don't get it in the
more affluent areas. In the classes beforehand someone from the partnership project should
come in and say there is no need to put a £150 suit on Mary for her Communion. I won't live
above my means. It’s the parents' fault. I would say "Now ladies, none of this! For weddings
our budget went to £50 each and that's it. But Christmas I can understand!"

31
Thelma's matter-of-fact approach to life is conditioned by a relentless struggle to get the
best for her disabled child. Familiar with fighting authority she has no time for what she
considers to be senseless spending. And with a disabled child to care for within the
family, brothers and sisters mature quickly. Yet for poorer families the focus on the
child is part of a transfer of desire where the social is concentrated on the child. As
Carol comments:

I know there's a grant for it. Its means tested though and you've still got to splash out. It’s a
special day in their lives.

Communion and Confirmation celebration constitute days that punctuate the otherwise
drab existence of coping with debt. It also provides a way of legitimating debt. Very few
of the loans taken out with moneylenders solely financed communion clothing. Often
there was a surplus that would form a "reward" for the borrower to sweeten the bitter pill
of repayments and make everything worthwhile. This could also be seen to operate
where a moneylending loan financed rent arrears - the larger the debt, the larger the
"surplus" that could be generated. It could then accommodate Sean's holiday for
example. But spending that part of the loan is always legitimised in some way by the
borrower.

2.6 Children, shoes and school

In the single most common theme of interviews in this study, children dominated
objectives of debt-strategy. They constituted reasons for getting into debt, and for
staying in debt. Katrina confirms this pressure.

When the kids get to be teenagers their tackies (trainers) are £40.00 if you're lucky. Across
the road a mother paid for £100 for her son's tackies. They have to be a certain name -
Adidas and Puma ...I have two young lads playing soccer. The price of soccer boots! People
don't think about that! I can't tell the kids. "Everyone else in the street has £40 tackies and
you'll have £4.99 ones" You can't do that to teenagers. I know people say you shouldn't get in
debt for them but teenagers are teenagers. They have enough trouble going through life ...
without being labeled.

The drain on the household economy represented by children's clothes presented a

continuing difficulty. Because of the periodic nature of a large expense it could only be
contained by "keeping somebody back", not making a debt repayment or a rent payment.
Shoes in particular represented a major commitment.

On reaching school age, children are perforce obliged to enter into a different social
world. Negotiating relationships in education institutions can prove extremely difficult
for children whose parents are in debt. They have to transfer the demands of school back
to the home where parents are forced to accommodate funding for books, materials,
social trips and functions. School meals must be purchased and uniforms provided. In
fact, clothing constitutes one of the most critical areas, as peer group pressures on the
child induce a desire to conform. This social pressure transforms into financial pressure
for the whole family.

32
Despite availability of grants for schoolbooks, these failed to cover costs. In particular,
primary school books presented a problem. The school often required that certain books
be available in class, and the demands of the timetable would diminish the possibility of
books being shared by family members. Families often found themselves forced to buy
more than one copy of a required textbook.

One of the books is used for three years. I have to get three copies of the same book
because my three kids might be using it at the same time. The book grant is at the end of
September and they must have them by the first - so I have to borrow. One boy this year only
got £16 grant, which doesn't cover the cost of that £17.50 book. It's ludicrous and should
definitely be looked at. It should be given out before people buy the books. The kids who
have grants - their names were called out over the intercom. "These are the children! Please
come out for your book grants!" My daughter said "I'm not leaving the class when my name is
called out like that". The stigma is there. It's embarrassing when a teacher asks in class "Why
haven't you got that book".

Mary O’Donoghue has pointed to the stigma incurred through this kind of procedure1.
Stigma constitutes an area that could be tackled at local education level. Attempting to
accommodate the late payment of the grant, Theresa takes out a "bridging" loan. But
when she finally obtains the payment everyday expenses immediately consume it. In this
way the education authority influences borrowing patterns. Certainly, re-scheduling the
book grant payment system would restrict further debt.

2.7 Ill health and disability

The relationship between ill health and debt can be commutative - that is, ill health can
create debt problems whilst debt creates ill health. For a person moving to disability
benefit, disruption in the flow of benefits can create a financial strain from which it is
difficult to recover. And the struggle to secure welfare rights can be time-consuming
and costly. Although Thelma's husband was in employment, his overtime payments
excluded her from medical benefits. It was only due to her determination and the support
of her whole family that she coped with doctor's fees and weekly medication bills of
over £50. With her husband's earnings and contributions from her daughters, Thelma is
now repaying a massive Credit Union loan.

As Mathew got older I couldn't lift him, and the bathroom was upstairs, so we got an
extension on the bottom floor. I turned my sitting room into a bedroom and the kitchen into a
shower. We got the extension with some help from the Local authority who paid half (they
give you a maximum of £5000) but I had to borrow the other £5000 from the Credit Union.

Thelma had to struggle to get a medical card, which would pay for doctors' bills and
medication. And after Mathew's operations she had to struggle for his admission to the
local school, rather than the special school for the handicapped preferred by the
education authority. This effort took its toll in family mental health.

Pain is an awful thing - he cries with the pain in his sleep. Excruciating even with a sheet. I
couldn't tell Duncan (my husband) how I felt. He would start crying and then I would have
both of them on me. I would get on my coat and walk. I could walk 60 miles an hour. Some
people scream. I walk. I think this world gets you in one way or another and you have to go
through something. So that's mine done now. But it makes or breaks you, and I came out a
better person than 10 years ago. A psychologist helped us both and that's what she said.

33
All the members of Thelma's family are living on a knife-edge. They have to maintain a
car and a telephone because of Mathew's handicap and can only just make ends meet
through stringent economies. Although Mathew is becoming more self-reliant, care is
the driving force of money-management in his household. The family lives on the very
brink of indebtedness, knowing that any lapse could threaten Mathew's growing
independence.

Budget Sheet “A” Staying Out of Debt

Thelma: The Credit Union was very good -I thought I wouldn't be able to afford it. My girls are
working but if they decide to get married I couldn't afford to pay back the £40 a week ... The day I
pay this debt I'm going to treat myself to lunch in town. I'm looking forward to a year next August,
please God!

Because of their child's handicap Thelma and Duncan have increased expenses. Running a car,
paying off the Credit Union for a ground level extension and maintaining a telephone are all
extras that dominate the family budget. Without the contributions of two working daughters the
family could not cope.
_________________________________________________________________

INCOME:
Husband's income 140.00 (plus overtime)
Children's allowance 12.00
Attendance allowance 20.00
Working daughter 1 contribn 50.00
Working daughter 2 contribn 50.00

TOTAL INCOME 272.00

OUTGOINGS: Arrears
Mortgage 33.00 -
Electricity 6.00 -
Gas 10.00 -
Food 130.00 -
Car repayments 38.00 -
Car tax/insurance 10.00 -
Petrol 12.00 -
Credit Union 40.00 -
Telephone 4.00 -

TOTAL OUTGOINGS: 283.00 Total arrears: -

Miscellaneous expenses bring Thelma's total outgoings to £310. She uses her children's
allowance to pay for large single payments and her husband's occasional overtime allows her to
buy clothes. It’s a precarious system that needs careful budget planning. She has managed to
contain the expenses associated with travelling to hospital for her son's operations, and when the
authorities tried to place him in special education she fought successfully for his inclusion in the
local school.

34
Dolores, a lone parent caring for six children, now has considerable debts. She attributes
initial borrowing directly to the ill health of her child followed by the death of her
husband.

My husband never did a days work in his life - I was doing it all. When my daughter was born
she had no back passage so I had to (give up work and) stay in the hospital in Boomtown. It
was very expensive and it started me borrowing. Up and down, up and down - I was more in
Boomtown than anywhere. It's expensive for the little bits and pieces you have to take to the
hospital like. I split up with my husband, the travelling was that bad. I had a debt with one
fella, that's £26 a week so I borrowed from the Credit Union £400 to pay him back. I was
going grand until I started borrowing again ...

Shortly after Dolores' separation her husband died and despite assistance from relatives,
funeral expenses increased her financial pressure yet again.

My husband died last year and funeral came to £1000. His six brothers each pay £2 a week -
because my nerves are cracking up. Five or six hundred has still to be paid and it’s in my
name. Then there was a confirmation. I kept borrowing and borrowing and borrowing ...

The result of giving up work due to ill health can include borrowing - although it is often
located within a complex series of related difficulties. In the previous case family ill
health led directly to an approach to moneylenders and separation. In the following
example, Margaret's pregnancy, miscarriage and subsequent hospital confinement led
to marital disharmony, further ill health and consequent borrowing.

When I was working in the factory I was saving and I had no debts. I had overtime and
everything and I loved working. Things started to crack up when I was after losing the baby.
The baby died on me. So I gave up work and got pregnant again and then I had to stay in the
hospital for 9 months. Then the baby survived luckily enough. The baby came first. My
husband and me were arguing at that stage over the child and all this.

A complex sequence of pressures linked to the desire for a family resulted in borrowing
going out of control. Despite her husband's income from a job scheme, Margaret's
lengthy hospital confinement, loss of income and disagreements about the child created
severe difficulties within the relationship. When Margaret was discharged from hospital
with her new baby she found everything had changed.

When I came out, everything was gone wrong - berserk you know. The drink has caused it.
Drink all the time. I wanted to see my baby looked after properly and I didn't want (my
husband) setting an example with the Labour and that. We had arguments about everything
and anything. I started getting into moneylenders. He was drinking and I was paying all his
debts off. I had all these debt collectors coming to the door - banging at the door.

Margaret and her husband separated - although he eventually paid his outstanding debt.
But he inadvertently confused an already complex situation by returning for short
periods to the family home - adversely affecting Margaret's benefits and increasing her
borrowing to a sum in excess of £2000.

Problem of benefit payments also affected Liam. Permanent disability caused by a

sports injury began a sequence of events, which left him with a serious driving
conviction, considerable debt and a mental health problem. Liam felt that he always had
enough money until his football accident. But his wrist injury required extensive bone
grafting and he was no longer able to work as a gas fitter. He was already beginning to

35
find ordinary living expenses difficult when he was convicted for driving his cousin's car
without insurance. Fined £900 and community service, his only recourse was to
unlicensed moneylenders.

Budget Sheet “B” Getting Into Debt

Liam: You either pay them or you don't walk. They won't take no for an answer. You have to get
it for them.

Liam is 25 years old and married with three children. Now permanently disabled because of an
accident he is unemployed. He was only able to pay a heavy motoring fine by borrowing from a
series of unlicensed moneylenders, one of whom has taken the family's child allowance book to
pay off arrears. Suffering from anxiety and depression, Liam has been a psychiatric outpatient for
some time and since his suicide attempts, doctors insist on giving medication by injection.
_________________________________________________________________

INCOME:

Disability benefit 124.80

TOTAL INCOME: 124.80

OUTGOINGS: Arrears
Rent 9.00 207
Electricity 10.00 201
Gas 2.00 -
Solid Fuel 10.00 -
TV/Cable 7.00 149
Food 76.00 72
Travel 13.00

Moneylenders: 1 54.00 -
2 14.00 128
3 7.00 -
4 7.00* -
5 3.50 -

TOTAL OUTGOINGS: 205.50 Total Arrears: 755

_________________________________________________________________

Liam's main priority is in paying the unlicensed moneylenders who have threatened him,
accumulating arrears only with a licensed lender. Holding back the rent has resulted in a recent
eviction notice. He owes £400 to his mother who is paying Moneylender No 4*. He is hesitant to
approach the Credit Union for assistance because he considers that its local staffing is too
intrusive. He feels that the system for making emergency payments is arbitrary and unfair, and
has contributed to his position.

36
 I was working. Comfortable - not good pay but you could live around it. Getting into debt
was quite easy! I broke my wrist and then I got fined in court for driving without insurance.
They fined me £900 in 1991. The solicitor said I was unfortunate. I was with 4 or 5 different
drivers who had done a lot of damage - and they were slamming the hammer on anybody.
So I borrowed £400 off one fella. £100 off of another. £200 from another. The rest was
kind of small - £50 from one or another. And another one was £150 - my mother paid him
off, every week. She's a pensioner but some of these people don't take no for an answer.
You have to get it.

Suffering from difficulties caused by delays in transfer to disability benefit, Liam was
already in a vulnerable position. Borrowing large sums from unlicensed moneylenders
seemed preferable to a term in prison. Under threats of violence Liam now ensures that
his payments are up to date. To accommodate his creditors he holds back other payments
and has arrears in rent, electricity, cable, TV rental and local shop in excess of £700.
Through unrealistic sentencing, the court inadvertently imposed a budget system within
which illegal money lending assumed priority.

In common with Liam, Francis still suffers from the results of a serious accident and has
difficulty in getting to the centre to shop. She too had problems with a change in
employment status - and delays in her transfer to disability benefit helped boost her
debts. Although she has now overcome moneylending debt she continues to have
difficulty with basic living expenses.

I'm six years here and I only got the £63 this year. When my fella died they gave me disability
and then cut me off it. They told me to sign the Labour and I signed "not available for work".
They were telling me to go to work and I couldn't so I went to my doctor. He told me he
wouldn't let me go to work. He said he would be in trouble if he did. So I went before a couple
of Boards and they sent me to their own doctor - and he didn't even know what spondulitis
was. He cut me off my disability. So I went and signed the dole. Anyway I appealed and got
back on.

Francis attributes her initial debts to this period. Nervous about her mounting rent arrears
she organised small loans from an illegal moneylender, which she topped up from time
to time. This borrowing stopped with the death of her moneylender but she now finds
herself permanently behind with rent, electricity and food payments. She attributes an
increased appetite to the effects of medication for her multiple injuries. Now her food
bill eats almost all her allowance.

John Brady's study of seven indebted families1 suggests that women cope with an
unequal burden of financial and debt management. This study bears this out, but within a
social framework where women are pushed to the forefront to deal with payments,
collectors, and the local authority. In this study men tended to lack visibility. Although
appointments were made with married or cohabiting couples, interviews generally took
place with a female partner. So, absent or hidden, men were always relegated to the third
person. In common with Janet Ford's observations1, debt was used as a negotiating factor
in relationships. Here, women became the victims of blame, taking the physical and
mental brunt of traditional male expectations and demands.

The study suggests that women take responsibility for financial affairs not only because
they are traditionally the ones who makes ends meet, or because their available time is
socially undervalued, but because interactions with those in authority - generally men -
will be softened. This serves to promote success with welfare payments or reduce

37
antagonisms from collectors. (Certainly women in this study do not receive the threats of
violence that men report.) The effect on women however, is to increase anxiety and
promote ill health. The woman finds herself trapped within a cycle of debt and illness.

2.8 Inability to cope

Several participants in the study were unable to link their indebtedness to any single
specific cause and merely found it difficult to cope with the demands of everyday life.
Lisa represents one of these cases. She can't remember the time she wasn't in debt,
although she feels that she could manage her income if she no longer had heavy
repayments. In care until 16, she is now married with 4 children and, although she is
now only 26, she already has a history of arrears and defaults on personal loans.

I've never had a clear rent book! I'm after getting in a horrible state. The rain is pouring in. I
had a letter from the Local authority saying that unless I clear my arrears that they are not
doing anything - so we can live in the dampness forever. ESB is about £36. I cook with gas.
The kettle, fridge, washing machine. Arrears are £63. I've had my lights cut out a few times
but as you can see I throw them a fiver, a tenner, a fiver.

Lisa feels that inflation - particularly the price of children's clothes and books for the
school - has contributed to her position. She has defaulted on moneylending debt so
often that she now finds it difficult to get credit. Restricted to loans for furniture and
household goods she purchases goods from moneylenders and re-sells them in order to
survive. Indeed, children growing up was often cited as a reason for starting to borrow or
hold back payments. In the next two cases kids growing up put too much strain on the
family income. Although Kathleen's husband has a part-time job the family income is
only £170 and she quickly found herself in debt for food.

It was the local shops that started me. I owed £90 to one. I am paying £10 a week off it and I
can't go back there no more. When the kids started growing up ..... they went back to school
and I got a loan of £100. They're always looking for things for things. They need this and they
need that ...

In 1991, a charitable donation prevented the family's eviction. Unable to keep up with
rent payments Kathleen's family now owes £200 in rent arrears and is threatened with
eviction for the second time.

Almost everybody in the study accepted some blame for their indebtedness, but those
who could not attribute indebtedness to a specific incident or sequence of events were
more likely to blame themselves. Karen could attribute no single cause to her
indebtedness and was drawn to blame herself.

It was bad management. If you let the rent go one week, then it’s hard to get 2 weeks money
the week after. Then its three weeks and the rent man kind of refuses you. You have to buy a
pair of shoes and you hold a payment back. Or one of the kids gets sick you know - you're
more worried about their needs than your own. So it just slipped - we was getting along fine
and something happened. But I'll know better the next time. When I'm straightened out I'll be
able to manage.

38
Feelings of personal guilt were mixed with bitterness towards levels of benefit or
administration of the welfare system - and these opinions were articulated at one and the
same time. Those who described themselves as unable to cope were more likely to
blame external factors beyond the control of the family, and were less likely to have a
clear idea about resolving problems.

2.9 Conclusions

The relationship between debt and low-income is characterised by a complexity of

factors, the most outstanding of which is crisis. It is here that moneylenders enter the
stage. Although this study does not seek to highlight any one mode of indebtedness,
private moneylending haunts these pages like a spectre. Discussions with licensed
moneylenders reveal that at least one firm operates on the principle that a family has a
crisis every 12 weeks. Living to the limit of a low-income there is no room to
accommodate that crisis and moneylending operates in this restricted space, offering
credit where no one else will. It feeds off poverty and perhaps it cannot exist in its
absence.

Low-income, ill health, unemployment and separation all contribute to indebtedness. But
often a single factor can propel a family otherwise coping to state of indebtedness.
Related factors then combine to prevent a return to the coping stage. What does this
mean for an advice agency? Can and should an advice agency seek to prevent these
causal factors? Clearly it would be impossible, at least in the short term, to eliminate ill
health, accidents and chance occurrences that contribute to indebtedness. But it is
possible to ameliorate the circumstances within which they occur. Thus a close
connection between money advice and anti-poverty initiatives should be maintained and
intensified.

The study has touched on the role of celebration in the structuring of indebtedness.
When families are only just coping with everyday calls upon available money, the role
of Christmas, Confirmation and Communion serves to precipitate the debt process and
determine its shape. It then becomes part of the generality of debt in a situation where
people cannot cope. The study notes the way that any kind of change can adversely
affect the ability of the family to cope on a low income. In particular the ceremonial
places an enormous pressure to raise money from limited credit sources, such as loan
sharks. The study notes the importance of ceremonies, but conjectures that sharing could
replace the competitive social pressures that have emerged as the inevitable companion
of what are essentially social rituals. Perhaps a modification of existing practices could
lead to retention of the substance of ceremony without recourse to credit.

If a subculture of indebtedness exists, it is one in which there are transformations and

mutations, where pleasure becomes pain, where things become their opposite. Within
this arena, the celebrations that punctuate the limited social world of an indebted family
form an almost sacred and unchallengeable driving force of debt. Yet to deny these
moments would only serve to reduce pleasure and sharing.

Additionally, factors that engender indebtedness suggest areas where money-advice can
target preventative measures. Newly registered unemployed people, first-time tenants,

39
pre and antenatal facilities, hospital admissions and preparation for religious ceremonies
should be considered target areas for pre-emptive educational work.

Some factors fall within the realm of policy. Bumps and grinds in the benefit system
contributed to three of our participants' problems. Whilst their final status was being
established beneficiaries were forced to consume savings or borrow to cover daily
expenses. As we will see in the next section, participants in the study were dissatisfied
about the system for emergency payments or charitable assistance during this kind of
period.

The findings of this study indicate that reviews of the following areas should take place:

(1) Decision-making in the administration of welfare benefits.

(2) Availability and access to guidelines concerning eligibility for benefit and transfer
of benefit procedures.
(3) Systems for emergency and other single payments.

The study suggests that where people start to lose control of family finances they turn to
moneylenders to pay rent and ESB arrears - an initial step in career debt. An advice
service can intervene in these areas through mediation and representation, and could
assist in shortening periods where eligibility problems might contribute to initial debt
accumulation. The coordination of agencies could ensure that the flow of available
monies is directed inwards to rent and electricity rather than outwards to moneylenders.

One family represented in this chapter actually met as a family on a weekly basis to
discuss finance, borrowing requirements etc. Although heavily in debt they were all
aware of commitments and they could plan to a limited extent. They also experienced a
feeling of control, which set them apart from other participants in the study. In particular,
the borrowing of one partner without the other's knowledge was complemented by a lack
of knowledge about each other's commitments. In one case the husband knew as little
about the cost of children's clothing as did his wife about the electricity bill. An advice
service may not be able to prevent crisis but it can seek to limit further problems by
advising the family rather than the individual. It therefore recommends that in addition to
establishing financial commitments, money-advice interviews should seek to establish
the context within which indebtedness takes place.

Laing and Cooper1 criticised traditional psychiatry's focus on the individual, comparing
it to an attempt to help an ailing football team by interviewing players separately and
never watching them play. In the cases examined by this study, it was women who
sought help whereas men tended to become invisible. The examples from this section
indicate that the involvement of men - or its absence - may well improve chances for
success of an interventionist strategy. When dealing with families an advice service
should strive as far as possible to involve at least both adult partners and possibly other
family members.

The study recognises that the school is a central factor in the debt process.
Marginalisation and social exclusion force the focus of the isolated family inwards to the
home. In the framework of confinement, of being unable to "get out" of indebtedness,
parents see education as offering a very powerful opportunity to the children. Parents are
extremely anxious therefore to promote educational success. Whilst this would otherwise

40
constitute a laudable objective, school-related expenses become part of the debt process.
And the stigma and labelling that accompanies public revealing of low-income helps to
confirm the families as "indebted", increasing their social isolation. This study re-affirms
the seven-point plan proposed by partnership in its Educational Costs and Welfare
Provision report. It further recommends an increased attention to reducing the continuing
stigma-inducing practices that affect school children and their families.

In the following chapter the study looks at career debt's central core - the management of
debt. In an examination of the debt process we look at the everyday world of debt within
which social relationships and relationships with authority are constructed.

41
CHAPTER 3. Living in the dead zone: The world of career debt

Sixteen tons and what do you get

Another day older and deeper in debt
St Peter don't you call me, I just can't go
I owe my soul to the company store

3.1 Overview

This chapter looks at the consolidation of debt, and the way in which a family or
individual becomes confirmed in a career of debt. In essence it engages with the social
pressures and processes that define people as indebted.

The way in which debt is seen as unavoidable is tackled here, and in this chapter we note
the way in which home-centredness both initiates and consolidates a lifestyle entirely
constrained by manipulation of available credit lines. Here, spending on family and
home becomes legitimate whereas taking part in social world "outside" is forbidden and
pleasure is disavowed. The process itself is seen as ultimately destructive, since the
closing in of boundaries prevents engagement with available advice and problem solving
in the wider community.

Within the isolated and constrained world of career debt, those who are indebted learn
how to survive through a complex orchestration of repayments, building systems that are
for lengthy periods sustainable. Within this system, those collecting arrears are seen as
breaching the world that the indebted person has created. Through stepping over the
threshold of the home, they rupture the fabric of coping and management constructed by
the indebted person, creating ill feeling and hostility. The study examines the
vulnerability of creative credit re-payment and notes the increasing isolation of families
who recognise that they have reached crisis point. The deterioration in mental and
physical health, which accompanies this process, is explored.

This chapter also deals with the moneylender who plays an ambiguous role in the debt
process. Both friend (supplier of easy-to-obtain emergency credit) and foe (most
pressing creditor) the moneylender is both accessible and dangerous. In this study,
interviewees often failed to distinguish between licensed and unlicensed moneylender,
and treated both in the same manner. Conversely, there appeared to be little expectation
of stability of repayments on the part of moneylenders. The study notes the networks of
community recommendations through which people in the community "find" their
moneylenders, and suggests that this might be reversed to involve friends and
neighbours in self-help activities.

Inconsistencies in allocation of benefits - particularly those administered by voluntary

help agencies - are examined and the study recommends the way in which benefits,
payments and other forms of help should be more transparent. That is, members of the
community through becoming aware of guidelines and criteria should be able to observe
and understand assistance mechanisms.

42
3.2 Introduction

This section deals with the social world of indebtedness. It is an attempt to convey the
experiences and feelings of individuals and families who live with permanent debt. An
understanding of these feelings can inform an advice service, helping it to relate to those
in debt and to fine-tune practices which can encourage its use in the community.

It is also an attempt to come to terms with a sub-culture of some complexity. The world
of indebtedness in Loantown’s housing estates is characterised by a set of social
customs, ethics, values, argot and mythology. To describe coping strategies and
comprehend the dynamics of indebtedness necessarily involves a deconstruction of what
has for many become a "taken for granted" world.

How do people cope? What payment priorities do they have? What dealings do they
have with creditors? What is the effect of all these things on their personal health, their
relationships with family, friends and neighbours, their outlook? How do they see
themselves? And what is the effect on the communities in which they live?

3.3 Unavoidable debt

For most of the participants in the study, living with permanent debt had become
"normal" and in common with Liam (Chapter 2) they have affectionate memories of a
time before debt. As Deirdre comments, "It was lovely!". Our first chapter dealt with a
number of circumstances promoting debt acquisition. Some of these circumstances were
highly specific, but not uncommon occurrences - so what is the substance of primary
debt acquisition. Why do people first borrow?

Daly and Walsh1 have drawn attention to the popular and erroneous view that becoming
indebted is accompanied by a feckless character and inability to manage a budget. Yet
the state of indebtedness involves an acknowledgement of inability to meet everyday
commitments, a conceptualisation of what debt means and a framework for legitimation
of purchases. Katrina characterised her debts in the following way:

I consider myself to be "in debt". Credit to me is as if I had a store account in Todds and it
would be up to me what I purchased. It would be a debt I inflicted on myself. But with rent,
electricity, moneylenders. These are things that have to be paid every week. I have really no
control over that type of debt. Now please God after the Confirmation of my little boy I will get
more on my feet.

Here, debt can either be "self-inflicted" or "beyond control". In this case, rent and
electricity are beyond control. Moneylenders seem just as inescapable because they
supply monies to finance unavoidable expenses. In this world-view, debt is inflicted
from outside of the self by a system beyond the control of the individual -so blame and
guilt can be proportionately reduced. The marginalisation of the low income family
promotes a world view determined by two oppositional elements -inside and outside the
home. These elements provide for legitimation of borrowing. Home is central to Linda's
life and although her main problem started with her separation, borrowing was already
part of her lifestyle.

43
 It was all things for the kids and the house. If I had an occasion like one of my brothers was
getting married, I might borrow £200 to get a present, buy something to wear to go the
wedding and to have money in your pocket that day. Or it would be Christmas time, I'd want a
few hundred to buy all their clothes and an extra bit of fire in. It was in the household - not for
anything wasteful.

Christine and William had been in the habit of borrowing small sums to meet
intermittent bills like the TV license. But despite clearing up loans through
compensation for an industrial injury, they slipped back into debt shortly after
refurbishing their house.

I was well able to pay loans you know. For the television license things like that. I cleared all
the debt when William got the money so when we came into this house we had no debts. And
we spent the whole lot on the house. Bought the telly, bought the video. We did everything
up top to bottom. We stopped the Credit Union and the moneylenders that we had for years.
Then I borrowed from one fella for bedclothes, household things - things you need. I didn't
mind that and I said if anything ever came up that we needed we'd get it from him.

Chapter 2 outlines the financial strain caused by the setting up of a new home. This
causes the focus of the family to turn inwards and as the emphasis on the home
increases, loans for household goods and family become legitimate. In this way
Deirdre's family started to borrow from moneylenders to furnish the home.

I don't have much but what's here is mine - it was hard to put here. I moved here with one bed
and a crib. What we have today we got, we saved for, or were given. Oh I love my house. The
loan to the moneylender should only have taken 9 months to pay back but I had that loan for
two years ... It wasn't for pleasure or anything -it was for the house. To put things into the
house.

Conversely, non-home directed spending becomes illegitimate. Thus any spending for
pleasure or on the self becomes taboo. The world of indebtedness subsumes a denial of
pleasure and the shrinking social world of the indebted person becomes rationalised.

Once in a blue moon we'd go out, but myself and Patrick, we're not ones for going out
anyway. Even at Christmas. We could put a couple of pounds by from the allowance if we did
want to go out - but we're not ones for drinks.

Deirdre's move to a new home and consequent focus in terms of spending is matched by
a denial of enjoyment outside the house. This is also represented by the experience and
attitude of Sean's family. Sean's ill health and move to a new home contributed to his
debt. But his emphasis on Christmas as a family celebration has led to immense strain.

I got sick of the whole lot of it - landing myself more and more in debt. Christmas was coming
and I was so ticked off that the kids were asking for this that and the other. And I got so ticked
off with saying "We'll see and we'll see" It got so bad that I had a nervous breakdown -
wrecked the whole house. So I ended up more in debt. I broke up the stereo. I broke up the
table and chairs. And it happened again last week.

Sean lives uneasily with career debt and he confesses to feeling completely trapped. That
confinement results in frustration directed at that which he most values - the home.
Ironically, the consequence of his frustration is an intensification of the family's
indebtedness.

44
 I feel trapped. Something is always going to crop up. Christmas is going to crop up. St
Patrick's day is going to crop up. Easter is next. After Easter there's the run of their birthdays.
It's 5 weeks to Christmas and three kids still don't know what they're getting. I'm finished 3
loans on the week before Christmas, so to get something for Christmas I'm going to renew
them loans. And that will give me £600.

For Sean, the series of family celebrations is the driving force in the maintenance of
debt. But his spending is exclusively home-centred and does not extend to himself. The
pleasure of family celebration becomes a responsibility and a duty, but involves a denial
of social life. Asked whether he ever had to sell anything to meet expenses, Sean replied:

If I sold something then I bought something else for the house. I sold things because they're
no good on the house. And we don't go out socialising. One, we can't afford it and two, we
don't agree with it. We can have things that we could better spend our money on.

The indebted person creates a structure within which he or she disavows pleasure and
activity outside the home. Finances do not in any case permit these activities but family
members create an ideology within which it is unacceptable - a value system that refuses
them permission to socialise. Conceptually, this process of disavowal1 represents a
narrowing of horizons - a closing in, where the house becomes not only a physical but
also a symbolic space. This self-imposed marginalisation has implications for
professionals offering counselling services since the isolation and confinement to the
home (which is as much in people's heads as it is in reality) is likely to decrease the
likelihood of seeking help or advice.

3.4 Displacement borrowing

Where families and individuals are indebted, their pattern of life becomes typified by a
series of transactions - all of which are designed to defer payment to a later stage. Family
and friends play a large part in this process, as do neighbourhood shops. The proximity
of borrower and creditor is important since physical closeness and regular contact
ensures repayment - so it's strictly a neighbourhood phenomenon.

With a husband on the dole and 4 children to feed and clothe, Lisa finds that her part-
time cleaning job isn't enough to keep up with the food bills. Three hours a night
contract cleaning brings her in around £80 fortnightly - which is enough to pay for meat
in a Loantown City supermarket. But Lisa relies on the local shop's credit facilities to
organise her budget.

The tick shop usually costs me about £80/£90 a week. Every week we get the dole and then I
pay them. And then I start again. Food is the first thing for the kids and there it costs more
than in a supermarket. Nappies and cigarettes included.

This kind of borrowing is useful to the indebted family, allowing a breathing space in the
distribution of funds. But the shopper is required to settle the outstanding sum within the
week so this space is one week at a maximum.

This is a credit book from the shop. I'll tell you how I got stuck there! I asked if she could wait until
morning for the bread and milk. She says "Why don't you get a few things and don't be worrying". So I

45
 kept going down and saying can you give me cornflakes for the morning - or I might need (bottled) gas.
The big bills are these with the gas in it. But you get your cleaning stuff and they give you everything.

Displacement borrowing is fairly static in character - representing only a time shift.

Although participants testify to its usefulness it is far from altruistic – it is more of a trap
in which ensnares the individual. It commits the individual to shopping in that particular
store - and because it is local, defaulting can prove embarrassing in a way which default
on a big store account card cannot.

Now you're supposed to pay at the end of the week. But I left a balance there of £8. I had a
heart attack over it!. Now that's included in my bill for next week. I hadn't enough to cover it.
They said "You'll get no more!" after me paying them so much! Then there's no money to go
into town to buy groceries, you've given them so much. You never get out of it - only by
winning money.

In consequence the indebted shopper is forced to pay more for food and basic household
supplies, including fuel. Dolores, for example, relies on the local shop to displace her
bill to the following week. But she knows that she has to pay or she will be unable to
shop there again.

I hold back the rent man but you can't do that with the shop. She wouldn't let you off with it!
The bill just keeps going up and up and up and I never think of stopping.

Dolores tops up her widow's pension with a part-time cleaning job. But with four
children her food bill accounts for half of her £138 weekly income. She has come to rely
on paying off her shop account with next week's earnings. With the food budget spent
the client must build up the shop account once more. Thus the appearance of
benevolence conceals a sting in its tail. Frances' lifestyle also relies heavily on the local
shop - although she arranges her cash-flow in a different way. Her local shop allows her
more leeway and is rewarded with customer loyalty. Frances regularly pays bills with
her total week's income, relying on relatives and baby-sitting perks to see her through the
rest of the week.

Go down to Molly's meat shop and look at my book for the whole year - it's never under £60.
It's handy for me even with the supermarket so near. I can't stand dropping money off at one
place and another .. so I like to pay off in bulk on one day. I haven't paid the rent man
because I'll pay the electricity tomorrow. Next week I'll pay Molly. The week after I'll keep my
money back from the shop again and I will pay the rent man. I'll go hungry for the week but it's
easier for me to pay bills with one week's (income) money every three months.

In this way an indebted person can create a personal cash flow through a variety of
devices - either negotiated or enforced through withholding payments. Only one
participant, Kathleen, had failed to pay a shop bill. Paying arrears of £95 at £10 a week
she finds herself barred from her local shop. With two children to look after, multi-debts
and currently facing eviction, Kathleen's loss of access to the local shop is a heavy
sanction. Unlike moneylending, the dynamic of short-term local shop credit must ensure
repetition from week to week, tying the individual to that store and confirming her
indebtedness. Here, short-term credit becomes long-term commitment. Yet the shop is
also tied into prevailing conditions. Refusal to “run a slate” would not represent a sound
commercial approach in low-income estates.

46
Participants often relied on the support of family and friends who lend small sums short
term. This would become a regular arrangement, one that forms a vital part of Theresa's
coping strategy.

Maybe you'd borrow a fiver here and there to see you through the week. I usually borrow a
fiver off my sister on a Sunday - but that's basically to make sure that I have enough for
school lunches on Monday morning. I repay that on a Tuesday when I get the Labour. When
I'm making up my budget I don't even include that - but when (my husband) gives me my
Labour I still have to shell £5 out. Automatically deducted - you get used to it every week so it
doesn't really count. We manage to get along that way.

In common with Theresa, small sums of £2 and £3 loaned by Deirdre's mother helps
her cope from week to week and she repays when she receives her benefit -and although
Mary's brother-in-law is on the dole, her sister regularly lends her £15 until she gets her
benefit. Clear codes of conduct for friends and family - who may also be on benefit -
ensure prompt repayment. Linda failed to repay her brother and a friend and now feels
considerable embarrassment.

My brother lent me £50 a long time ago. He never spoke about it so I said nothing and just let
it lie. Then a friend lent me £100 a few years ago. Unfortunately I never got back. I only paid
her £20. And when she pulled me a few times I didn't know where to go. When I see that girl I
run into a corner and hide. Even now I don't want to meet her. And she was a nice person.
She's very well-off but it's the principle of the thing. I should have paid her, but so many things
have happened and I never got the chance to get back on my feet. It's a bad experience for
me like.

In general, participants in the study expressed as much concern over small debts to
relatives, as they did about larger institutional debts. Where elderly parents were looking
after children so that part time work could be undertaken - usually for small sums of
money like £10 - there was anxiety about missing a week because "she's a pensioner and
she doesn't have it".

3.5 Administering career debt

Pawned my watch, pawned my chain

Would have pawned myself, but I was ashamed.
So much trouble! Sonny Terry and Brownie McGhee

With the exception of those who had places on FAS courses, all of our participants had
more outgoings than income - and had been in this position for some time. How is this
possible to maintain? Orchestration of repayments and the manipulation of personal
loans can assist in the creation of a survival strategy - the coping level. Creation of new
lines of credit, withholding of payments, semi-maintenance of arrears agreements; all
these establish the borrower firmly in a position of career debt. Here debt is confirmed as
a way of life and becomes the major factor in determining every aspect of a person's
social existence. The individual and family are inextricably enmeshed in a complex
series of financial undertakings - from which they have little possibility of escape.

A debt advice service needs to know about this process. Where initial borrowing to meet
an unexpected occurrence becomes institutionalised as career debt, the individual is

47
trapped. We want to examine the dynamics of this "enmeshment". It here that serious
indebtedness occurs and it represents the precise point at which rescue operations should
be mobilised. Although the career debt depicted here appears resilient it does not have an
indefinite life span. It constitutes a precarious system, vulnerable to evictions, to utility
cut-offs and to the threat of violence.

The study shows that where possible, families try to maintain rent and electricity
payments. But they do this in a fragmented way, paying where they can or by clearing
accumulated arrears through a private loan. We can see this in Sean's case. Now on
disability benefit, Sean gives priority to rent and electricity, preferring to finance any
shortfall through a complex series of loans from moneylenders.

Budget Sheet C: Managing Career Debt

Sean: It's Sheila that budgets the money .. I put the idea in her head and she agrees ...
Sheila: I know if we take on too much there's no groceries and nothing to eat...

Sean is married with three children. Although disabled his informal earnings supplement
the part time earnings of his wife, Sheila. Sean and Sheila plan borrowing meticulously
using friends and relatives to create "ghost" accounts. Sean makes suggestions about new
loans over which Sheila has "right of veto". "
___________________________________________________________________
INCOME
Disability Allowance 129.00
Wife's p/t employment 50.00
Informal earnings 50.00
Children's allowance 12.00
Fuel 6.00
TOTAL INCOME 247.00

OUTGOINGS Arrears
Rent 14.00 -
Electricity 10.00 -
Solid Fuel 11.00 66.00
TV HP & Cable 7.00 248.00
Food 98.00 -
Travel 4.00 -
Telephone 4.00 163.00

Moneylenders:
1. 36.00 460.00
2. 30.00 320.00
3. 12.00 -
4. 12.00 -
5. 6.00 -
6. 6.00 -
TOTAL OUTGOINGS 250.00 Total arrears: 1257.00

Sean priority areas are rent and electricity. Keeping money-menders at arms length by
visiting their office, he survives by holding back payments and negotiating top-up borrowing
to clear his accounts. So a current loan will be topped-up to £1000 just before Christmas
but he is likely to receive only half that sum. He started to save with the Credit Union but
found the extra commitment too much. His disability forces him maintain a telephone.

48
 If you don't pay they cut you so I keep my bill right - I would go to the illegal money- lender
rather than have my lights cut. If you have no light you may as well have nothing. I wouldn't
degrade the children like that. I'd lose my pride if the light was cut and the rent was in arrears.
The rest nobody knows about - only me and them.

Sean's family is typified by a pragmatic and instrumental approach to the manipulation

of private loans, and family members perform different roles in its management. Sean
puts up ideas for further loans and suggests ways in which they might be accommodated.
His wife works out what financial arrangements will work - and over what period.
Daughters and their boyfriends stand is as "front-men", providing a cover for further
loans from the same moneylender. Each week on a Friday evening Sean and his wife
meet in the front room and literally "put their cards on the table". Across a table strewn
with pink moneylenders' account cards, they discuss financial commitments, payments
and strategy.

My daughter and Nick borrowed a hundred pounds between the two of them. We pay back
£126. He and I pay £3 a week each. That's up to date. This is one I got for my sister
Margaret. She doesn't pay now I took it over. I borrowed £200 and I was supposed to pay £12
a week and the interest on that is £52. That's up to date. That's the way I work it. For my good
friend Fergus I also have the same agreement as that one now.

But Sean's family survives on larger loans through which they finance Christmas
spending, Communions and Confirmations - and the occasional holiday. Sean is
experienced enough to predict what level of default on payments will be acceptable to
the collector and is likely to increase commitments by reducing the frequency of
payments on other loans. Because he is aware that licensed moneylenders do not add
interest to the original sum, he enforces extensions to all his loans and by paying smaller
sums over a longer period, he frees up cash for further borrowing.

We borrowed £1000 and the total payment is £1500 over 12 months at £30 a week. As you
can see by my book I am only paying him £20 a week. When I originally took out the loan it
was December '91 and in April '92 I owed him £1265. Now I owe him just below a thousand -
another year. They don't add any interest. It's that sum and that's that. I pay that one off now.
£252 and £12 a week. If I have 21 weeks to pay there's 4 books that are actually mine. I'll let
one back and pay 3. The next week I'll keep this one back and pay the other three, and the
same the next week and so on. That's the way I'll do it.

This technique is not linear. Sean knows that for the last 21 weeks he has to keep up the
payments or he may not get another loan - this makes planning more complex. And he
also knows that the system is cumulative because he is forced to continually extend
borrowing to finance some repayments. Sean describes this by adapting one of the most
frequently used comments in the study.

I borrow from Peter to pay Paul and then I borrow from Paul to pay back to Peter. Keep them
happy, keep them smiling. We get everything out on a Friday and we sit down and we say
right - we have a meeting - discuss possibilities. We try to keep everybody happy, and it's
difficult. We're not going down but after Christmas we're really in trouble.

Sean is aware of the vulnerability of the system and of how far he can go and uses a
strategy that he graphically describes as "acting the maggot". Behaving unreasonably, he
has set out to sabotage one loan that he feels attracts unreasonable interest. By
consistently defaulting on a loan account he knows that his poor administration will
guarantee refusal of another loan. In this way he destroys a credit line that he feels is

49
exploitative. Not all participants in the study exhibit the complexity and sophistication of
Sean's approach. But their judgments and manipulations do represent a system of
priorities. Running four moneylenders at once, Katrina's main problem was the
electricity bill - formerly the responsibility of the husband from whom she separated.

I would use the moneylenders to avoid harassment from the local authority or the electricity
board. I never had any harassment from moneylenders because I would go to another one
and pay that one off. I avoided it that way you see. If you go to the Credit Union they want to
know what you want the money for and I think that is quite good. But I went for assistance
with the light bill and they said "No. Make an arrangement". So I went straight to the
moneylender! ... It was a case of having to. When I got an eviction notice I only had seven
days. It was a matter of straight to the moneylenders and down to the local authority and clear
it.

Sheila also had difficulty after her husband left. The pressure of her electricity bill
forced her to borrow from moneylenders and she follows a similar path to Sean in the
manipulation of debt. Her crisis debt was "resolved" through the series of personal loans
that now ensnare her.

When we split up I had a lot of debts - electricity board, cable TV and a bank loan. Now I'm up
to date with the electricity board but I only cleared it with the loan sharks! (I always say I'm
working to the loan shark.) If I'm due a loan for an electricity bill I might pay half of it and get
some clothes for my son. I have three separate loans - two £100 loans with interest of £27 on
each and another for £300 with £81 interest. Repayments are £15 a week altogether. I have
another two but my man is keeping the repayments book until I get straightened out. I will
because I'm hoping to get another (loan) for Christmas. I'll make sure I pay weekly even if
someone else gets left back ...

Initial crisis led her to clear a debt with the ESB. Now she is never in arrears but
habitually uses personal loans to pay bills. Sheila is on a conveyor belt where she
continually loses ground. Similarly, Linda experienced problems after her the break-up
of her marriage - a situation that intensified when her sons got into trouble with the
police.

I owed £70 and to me that was an awful lot - you know, I thought that was terrible. I was in
arrears for a long time but I got myself straightened out. Borrowing money (from
moneylenders) to straighten yourself is one thing ... but that's the way I was doing things you
understand.

Linda states that she no longer has rent arrears and claims to be "keeping out of debt".
But she knows that she is going to have to take out another £100 loan for children's
clothes. She is locked into career debt - but aware of the difficulty of changing her
position. This kind of case represents a transfer of creditor. By shifting the debt to the
moneylender, the borrower secures her position regarding home and basic utilities. The
moneylender might constitute an ever-present physical threat but he has no power of
eviction nor can he cut off electricity. The borrower reorganises the balance of power in
her favour - enduring the anxiety, threats of violence and probable neighbourhood
stigma. But it represents a rational transfer where personal security is exchanged for
domestic security. Here again the tendency is to retreat into the home, preserving what
one can.

50
3.6 Dealing with arrears: "The rent man never calls twice"

They even took the house I lived in away!

I got so much trouble ... gonna go insane.
So much trouble Sonny Terry and Brownie McGhee

In the complex world of career debt not all participants in our study ensured that rent or
electricity were up to date or paid off. Almost all participants in the study mentioned
problems with rent and electricity payments. Until recently it had been possible to build
up substantial rent arrears. A shift in Local authority policy now means more eviction
notices1, and two interviewees were awaiting eviction at the time of the study. Where
rent arrears became integrated in the general patchwork of debt and repayment, the
pressure exerted by moneylenders would most often determine the final distribution of
available monies.

Rent collection shares some of the activities of moneylending - sharing territory, clients
and mode of collection. It means that Local authority has a face-to-face contact with its
tenants, literally on their own doorsteps. Where people are having difficulties meeting
payments this arena is almost bound to be a source of conflict, and the attitude and
behaviour of rent collectors gives rise to considerable criticism. Conversely the absence
of rent collectors also gave rise to criticism. This section deals with the indebted person's
personal contact with collectors, and feelings about collectors. Making arrangements to
pay is dealt later in this study.

The importance of the rent collector should not be underestimated. He is in a position to

spot likely problems and can encourage tenants to make agreements with the Local
authority. And a money advice service needs to rely on people in the field to make
referrals. Yet the rent collector plays a significant role in the demonology of the indebted
subculture - perhaps even more than the moneylender.

I prefer to face a rapist down the road rather than face the rent man. He downgrades you like.
He looks down his nose actually, because he thinks he's the big man. He talks very
aggressive like and he belittles you. If you told him you hadn't the rent it's "I won't be able to
get my wages if you don't pay your rent. What are you doing with your money?" As if we were
out every night of the week drinking it ...

Carol has now remarried after suffering violent treatment at the hands of her first
husband and is undergoing psychiatric treatment as a result of her experiences. In order
to avoid the rent collector and moneylender, Carol and her four children would hide
behind windows covered in Windowlene. Although a personal development course has
increased her confidence she still won't open her door in case it is the ESB collector.
Similarly, Frances, whose attitude to payments systems in general is fairly idiosyncratic,
has also suffered from the comments of the rent collector.

I go out and say I haven't it today and he says "Getting money out of you is like getting money
out of a turnip!" I never owed him a penny until then. It had always been up to date. I never
was in trouble with my rent. When they harass me they think they get the better of me - well I
get the better of them for it. I'm stubborn. Why should they do that to me? And that's the
reason I leave it in debt now.

51
For Frances, stigmatisation produces a definite response. She accepts the label and wears
it with pride. Acknowledging her position as underdog she has evolved an ideological
response in which the national and local state are oppressive. Margaret had a similar
experience when she was forced to finance her husband's drink problem, but sharing this
with others gave her confidence. Margaret and her children would hide from the
moneylender but always faced up to the rent and electricity collectors. She now finds it
easier to pay for electricity with an easy-payment book, but is still clearing off £100 in
rent arrears.

I always confronted him. The rent man might be in a cranky mood. And I couldn't listen to him
if he started. He'd say "What's this bag of coal doing outside the door and you've no money to
pay me the rent" Degrading me more or less. Sometimes I used to get embarrassed with it
being the front door and the neighbours - and I told one of the girls. She said "Well he's done
the same to me, Margaret."

Living alone in poor housing conditions, Frances manipulates her benefit to pay bills in
lump sums, targeting single payments with one week's income. She believes that the lack
of collection services and the inflexibility of the local authority are responsible for her
electricity and rent arrears.

... the man from the ESB doesn't come around here because of the vandalism and the
treatment. And it's all the rent man's go! It makes me laugh. The rent man has more authority
than the Superintendent of the fucking Gardai. Before Christmas I had the rent money and he
didn't come. They wouldn't take it at the Town Hall. "You have to give it to the rent man." But
he's only working for the local authority. They have computers and all the things. They can
enter that you've paid. It's not my fault. The rent man comes here on a Monday morning when
I haven't it, not on a Thursday morning when I get paid.

The collection system is unable to accommodate the income pattern of its clients. This is
reiterated throughout the study. Participants continually commented on the failure of the
rent collector to arrive at a convenient time; with competing claims upon their finances,
they cannot put money aside. A failure to collect means that the money will go
elsewhere, a problem experienced by Liam when he and his family moved to a new
home. He alleges that his situation was exacerbated by the personal animosity of the rent
collector.

I had trouble with my rent man because I had trouble with my rent. When we moved he never
wanted us to get the house and when we went into arrears he started passing the house out.
He wouldn't even knock. I had to send him letters from T.D.s. I know I'm in arrears at the
moment and I had to pay him £9 this morning that I hadn't got ... But he doesn't care. He's got
his house and his second car.

Lisa attributes her £92 rent arrears directly to disruptions in the normal rent collection
service. She tried to put the money aside but the demands of her but heavy debt
repayments immediately soaked up all her income.

My rent arrears go back to when the new fella came in the summer holidays. He used to
come at half past ten in the morning and then he wouldn't call back. That went on for 2
months nearly and it built up. Then you go through it! My rent is £12 so I'm paying £15 a week
to pay off the arrears.

Its an area that arouses much ill-feeling - although it seems that calling or not, the rent
collector cannot win. In the privatised world of the indebted person, occupation of the

52
house seems fixed and immutable. Its safety breeds a disregard for payment. Belief that
eviction has not touched those with astronomical arrears encourages further
accumulation. As Linda comments "I used to think, "Sod the rent man!” The rent
collector as gatekeeper is forced personally to stand in for council policy and has to take
the blame. The character assassination, and comments on his (mythicised) lifestyle may
be unfair, but are understandable. The study has drawn attention to the added physical
and symbolic importance of the house for an indebted person. By commenting on her
possessions or priorities the rent-collector crosses into the world of the indebted person,
breaching the threshold of that private space which has become so important. So
sensitivity should be considered here. The importance of understanding and
encouragement is demonstrated in several cases where our participants were trying to
overcome their problems.

The rent man in fairness to him - I owed him £75. I had the whole allowance and he wouldn't
take that - never ever lifted that. He said try and pay it at £5 extra a week. So I did and I was
clear by Christmas. He was saying it had to clear by the end of the year or it would be the
courts. Everyone says he's a bastard, but I found he was OK. The ESB fellas come round
and they're always threatening to cut your electricity.

It is not clear to what extent rent collectors offer opinions on likely legal action by their
employers. But people in the community feel that the collector's report-back will be
influential. After all, the rent collector is the Local authority's direct link to
neighbourhoods. Deirdre found the rent collector sympathetic. With arrears of nearly
£300 Deirdre had been paying off an extra £20 a week.

Three weeks before Christmas I went and said to the rent man I've just come in to give you
£20 for over Christmas and he said "Deirdre, the Local authority don't expect £20 every week.
It's only your rent money and a couple of pounds for Christmas. Try to make it up after". He
was nice to me. But they knew we were genuine - that we wanted to get out of trouble. We're
not one of these that say Jesus, pay for the first few weeks and pay no more.

On Deirdre's estate the rent collector is available to receive payments twice a week at the
local resource centre. She comments, "We're lucky here because the rent man always
comes twice". In this way the rent collection system can mesh with people's ability to
pay at particular times. It is generally felt that increasing rent collection callbacks can
improve even seriously afflicted local authorities, but pessimism exists concerning
change. In a report to the UK Department of the Environment, Sue Duncan commented,
"Because of the underlying socio-economic factors ... most authorities with high arrears
cannot aspire to become low arrears authorities; these ugly ducklings will never become
swans."1 In seriously affected estates, Duncan observed that residents made low use of
rent collections. The alternative of payment at a central office hinged on the initiative of
the tenant and resulted in a loss of contact between the two parties. However, estates
characterised by high arrears also exhibit difficulties with doorstep collections.

In a situation where a significant proportion of the population is having difficulty in

meeting obligations, collecting rent can be a stressful activity. Dramas, which reflect the
pain and anxiety suffered by those on low income, are often enacted on the doorstep. By
"passing the house out" the rent-collector avoids stress, but alters the household's cash
flow. This moulds the debt process in favour of moneylenders and tightens the grip of
indebtedness. Community-based collections may offer a solution however. The removal
of the meeting-point to a community facility eliminates at least one point of tension and

53
offers a more encouraging environment for negotiation. Moreover, it breaks down the
isolation of the indebted person and exposes them to the possibility of change. A series
of community neighbourhood offices that deal more specifically with the housing
function would not only break into the debt process and repayment patterns. It would
offer a location for a network of money-advice services, and provide a point for those
people otherwise isolated, to meet, chat and exchange experiences. Arrangements for
paying off arrears could also take place locally rather than at "the office". The use of
available estate housing for this function is not only more convenient but offers a more
accessible environment.

3.7 The moneylenders: Sympathy for the devil

So if you meet me, have some courtesy

Have some sympathy, and some taste
Use all your well-learned politesse
Or I’ll lay your soul to waste
Sympathy for the Devil: Rolling Stones

The first part of the study - getting into debt - focuses on the crises that thrust people on
low income unwillingly into career debt. And the study demonstrates that an informal
referral process that is neighbourhood or family-based typifies this world of private
loans. In a wider survey of moneylending practice Daly and Walsh (Moneylending and
low income families) stress the importance of friends and relations in introducing a
moneylender. For the most part, no one seeks out a moneylender or responds to an
advertisement. A friend or relation who already has a loan will recommend "her man".
Daly and Walsh feel that the reluctance of new clients let down their friends induces
loyalty to the moneylender. More usually known by their first name, the moneylender
quickly becomes a household acquaintance. In this way the moneylender spreads the
network of roots that now lie deeply embedded in the community.

According to the Revenue Commissioners, three (annual) moneylender licences have

currently been issued for Loantown. During the study, four were in operation in
Mayfield, one of our study areas. These were Shannon Credit, Murray, Henry Michaels
and Provident. Whilst all provide cash, Murray and Henry Michaels also supply goods
such as clothes or furniture. Discussions with licensed moneylenders reveal an
awareness of the social problems of low-income families and their company rule of
thumb which suggests that family crisis will generate the need for a loan every 12 weeks
is based on research carried out by their trade association.

Officially, ethical considerations inform licensed moneylending practice. The Consumer

Credit Association which represents moneylending interests, publishes guidelines which
theoretically determine good practice - covering canvassing, cooling off periods,
harassment and so on. The company to whom we spoke insists on the successful
administration of a purchase of goods account prior to authorising a cash loan.
Nevertheless it does not expect loans to be redeemed within the set time and estimates its
returns accordingly. The company claims that income from a small loan is now so little
that only a high turnover ensures viability. But, as loans gradually build within career
debt, the return to the borrower - the value received from the initial cash outlay -
diminishes rapidly. Within this framework, moneylenders occupy an ambivalent position

54
in Loantown's neighbourhoods and communities. Friend or enemy, the participants in
the study rely on moneylenders - and love them or loathe them, they are unable to do
without them.

In a previous chapter, Sean demonstrated a clear understanding of licensed and

unlicensed moneylenders - a distinction with which not all are clear. Borrowers are clear
about the way they are treated and about the penalties of defaulting on particular loans,
but only a few understood the exact status of the loan prior to making an agreement. In a
situation where money is fixed, more concern and thought is shown over distribution of
monies than of maximisation of income itself. The client is buying money as for any
other loan, but pays scant regard to "value for money". Here we have to distinguish
between the add-on loan and the top-up loan. It is the latter which becomes a key factor
in career debt and it marks the starting point for a transformation in which debt becomes
the driving force of the household economy.

Well we had the moneylenders - I was giving one £12 a week and another £10 a week -
That's £22 a week between the two of us. When I'd got a loan down to £40 I would take out a
new one for £90, but I would need to use £40 of it to clear off the first loan so I only got £50 in
my hand. That's the way it would work out. That's what ended up killing us.

The real cost of a licensed loan of £100 would generally be around £126, where interest
and collection charges account equally for the excess. Some companies do not allow
loans that clear off previous borrowing. Those that do exert a pernicious pressure on the
borrower and the community. Clearly the borrower will end up duplicating interest and
collection charges - although defaulting over lengthy periods will reduce this advantage
to the lender. Some moneylenders deliberately encourage the borrower to take on more
loans with devastating results. In the following example Sheila, coping with a part-time
job and owing money to her father for child-care, found the struggle too much.

I do blame the moneylender ... my sister had him but she didn't know him a whole lot. "You
need the money. I can get you a loan" she said. I've never been in debt but things were piling
up. The loan was great but then finding the £5 ... He'd get me to take another hundred. "Why
don't you buy one bag of coal instead of two?" Then I'd need other things .. but the loans don't
even go down when your renewing them again.

Almost all participants experienced this kind of pressure. A possible parallel with the
rent collector who makes comments about his clients is here reversed to indicate the
moneylender’s assessment of Sheila's capacity to pay. The intrusion is resented but the
pressure to borrow is intense. When it reaches crisis point, the borrower (as in Linda's
case, which follows) realises she has become enmeshed and throws the blame onto the
moneylender.

He kept bringing it and giving it to me ... he was at fault in a way. If he had said no, then we
wouldn't have got it. If you took out a loan he would bring another after a few weeks. He
would say "Sure, put that on another page, pay me another £6 and I'll give you another
hundred". Before you know it mounts up to £18, £24 (a week). That's a lot of money to be
paying out with so much interest on it.

Linda started to borrow to finance her husbands drinking, and can no longer recall the
amount of her original loan. Through continually mobilising top-up loans, she finally
owed £600 and could no longer make repayments. Although the moneylender now stays
away, she still fears that he may arrive unexpectedly and demand the outstanding sum.

55
Yet although the study indicates that the conduct of loan repayments is flexible, a
complete lack of commitment to repayments can result in the withdrawal of credit
facilities. Lisa who has multi-debt problems failed to conduct her repayments in a
satisfactory manner. Now she can only mobilise loans for household goods.

I had a fella (moneylender) and I cleared two loans through my job, but I couldn't get no more
from him. I still have one where I get credit if I need something for the house - or sometimes I
get something to sell it. I might give him £92 for something, then sell it for £40. Just to get me
out of what I'm in.

This was the most extreme case encountered in the study but it demonstrates the
community's dependence on moneylending. The indebted person cannot secure credit
facilities elsewhere and has recourse only to moneylenders. Although she is making an
effort to overcome her indebtedness Sheila still feels the need to keep her moneylender
"on tap".

It was only 5 weeks till Christmas. I was sitting up thinking - one of these nights where the
body's tired but your mind's working. I thought about going to John for £100 - he used to
come to my mother. I thought "Well he'd give it no problem. Another fiver is good for the New
Year like. I'll get another job.” It's the way the mind goes. Deeper and deeper. Christmas and
confirmation and communion - that's where I really get stuck.

Now in a special accounts scheme that pegs her commitments to a realistic level of
repayment, Deirdre experienced pressure from her moneylender who "fined" her for not
answering the door. Yet she acknowledges his value in an emergency.

The last fella was meant to be my last but I had a bit of trouble ...I got a letter through the door
and it said every time he calls and there's no answer it's £2 extra. It was an official piece of
paper like. I'm the type of person that if you roared at me I'd run and if I haven't the money ...I
hide. It was very degrading. No money and he'll be back Wednesday, Friday, Saturday
beating at the door ... You do need them at Christmas time - but they should sit down and find
out how much people can afford. I needed it for the house - I had nothing.

Top-up borrowing can be resisted. In our study Katrina was the only participant who
refused to accept the offer of top-up borrowing and could explain why. Here she
explains how easy it was to find a moneylender and how he encouraged her to top-up her
loans. Katrina had taken out a £200 loan on which charges amounted to an extra £54.
Paying £10 a week had reduced her debt to £100 at which point her moneylender asked
if she would like another £100. This could, he suggested, be achieved by taking out a
new loan and using part of it to pay off the remainder of the original debt.

You'll be talking to somebody about your problems and saying "Oh God!". Then they say "I'm dealing
with Fred. You can apply today and you can get it next week. He's great, he's very nice." Oh yes!
They're the nicest people … if you're paying them back ... Very obliging! So he handed me a hundred,
cancelled my debt and gave me a new book for £254. I said, "You're only giving me a £100. Why charge
me £54 interest?" "Because you're back up to the £200 debt, that's an extra £54." I said "No, I paid the
£54 interest on the original £200 - if you want to charge me £27 interest then that's fine." "No" he said.
"Your back to £200!" I said "No way Fred, keep it." Now he's doing this to an awful lot of people.

Katrina sums up the situation well. Had she secured a separate loan for £100 it would
have cost her £127 in total. She would have still been responsible for the outstanding
£100 but would have saved £27 in interest and collection charges. Thus unscrupulous
moneylenders maximise profits and provide themselves with funds to cover defaulting

56
clients. A licensed moneylender who provided information for the study insisted that
top-up loans were not authorised - although one participant claimed that he had made
such an agreement with that company. Our experience suggests that although licensed
loans appear to be self-regulating some agents do pressurise clients to take on extra
loans. Thus Sean in the previous section was able to mobilise many single agreements
but was not topping-up, hence avoiding double payments. Some are aware of the top-up
mechanism but the need for cash in hand breeds a disregard for the consequences.
Theresa says: I know there's a big catch there. But it doesn't bother me".

Licensed moneylender firms with their centralised organisation employ agents who
travel over a wide catchment area. They are not on the spot to exert undue pressure.
Observation suggests that their income depends on speed and coverage. They do not
have time to deal with single default cases and cause a letter to be sent from head office.
In this way they can draw attention to default and prevent any damage to client
relationships by deflecting criticism to head office. On the other hand unlicensed lenders
seem to be locally or even neighbourhood-based. In Katrina's case two brothers in a local
family ran the business. Their proximity alone ensures a lower level of default. The
consequence of this proximity will be examined later.

The Consumer Credit Association take great pains to demonstrate awareness and
concern for those on low income. It points out that it provides accessible credit to those
who are unaccustomed to banks and in a statement entitled "The un-banked are entitled
to credit"; it appears to make a plea for low-income groups.

... if Doctors Tony O'Reilly and Tony Ryan are entitled to their £10 million credit on the one
hand ... Mr. and Mrs. John Murphy of Clondalkin are entitled to their £50 loan on the other.

But our licensed moneylending contact was inclined to dismiss the practicalities of
offering full financial data on the basis of the client’s capacity for understanding.

It's no use showing people the actual APR because they don't understand. If I told them what
the APR was on their loan they would ask me if it was my car number...

The continuing emergencies which structure borrowing patterns for low-income families
do not allow for choice. Shopping around for loans is outside the experience of low
income borrowers. Borrowing is based on personal recommendation and loyalty to a
particular moneylender who then ensures an active credit line. Our contact's comments
hold good only insofar as the pressure to mobilise that additional loan precludes
examination of interest rates.

Participants in the study are not aware that additional sums payable on their loans
comprise both interest and collection charges. Anything outside the borrowed sum is
perceived as interest. The onus for providing this kind of information lies with the
moneylending agency - it should not be assumed that customers will not understand
collection charges. The Consumer Credit Association compares its costs with banking,
emphasising the service nature of collection (it estimates that collection costs an average
of 50 pence per call). Yet no participant in this study was aware that this was costed
separately.

And what happens when you can't pay? It could be argued that "not paying" is in itself a
type of system with rules of conduct. The language of participants demonstrates an

57
active rather than a passive attitude. Not "I can't pay him." but "I'll not pay him ... I'll
hold him back". A field trip with a moneylending collector revealed a direct and rather
candid approach. "I'm keeping you back this week Eamonn. I have my phone bill."

A collector, travelling over long distances, doesn't have time to argue, but it is more than
likely that he knows how clients manage their accounts. In general the study showed that
clients were given substantial leeway in repayments. Where debt repayments go out of
control, collectors attempt to make arrangements in the same manner as the local
authority or ESB - attempting to extract double or triple payments until the account is in
order. Just where that dividing line between under control and out of control is located is
far from clear and may constitute an instinctive judgment.

Alternate payments which double the length of the loan appear to be acceptable and even
spasmodic irregular payments will satisfy a collector - although it may reduce the
possibility of another loan. Long periods with no payment will result in a hardening of
attitudes as will consistent refusal to answer the door. Bald-faced refusal to pay can
result in the defection of the collector, although collectors maintain a minimal
surveillance to monitor the whereabouts of the defaulter. But hard-core illegal collectors
will not accept even one weeks default and are likely to use violence or its threat to
secure their cash. They appear more likely to use violence on a male client and much of
the threatening behaviour is restricted to slaps and pushes. The recent film "Raining
Stones"1 portrays this well, where violent language is used by the moneylender within
the home, creating an atmosphere of threat and fear.

In its campaign against unlicensed moneylenders, the Association suggests heavy

penalties and invites the public to inform on illegal activities. " ...people who cannot
obtain credit elsewhere will often turn to whoever will lend the money and that will not
be a responsible or licensed company ... the public should be urged to report anyone
operating without a license ... rewards could be offered for information ..."1 This
formulation fails to acknowledge the social dynamics of moneylending within the
community. The informal referral system precludes "turning moneylenders in".
Participants in the study routinely disparaged the effectiveness of reporting
moneylenders to the Gardai. Whilst well-intentioned, the Association tends to
exclusively target the Government in a demand for legislative change. The findings of
this study suggest that unless it additionally targets the community, legislative change
can only prove partially effective.

The study acknowledges that the Consumer Credit Association has significant role to
play. Its suggested publicity campaign may have a better chance of success if it co-
ordinated with community-based campaigns to reduce overall debt. It could assist in the
preparation of educational materials, and help to improve community resources. The
result of indebtedness is that the Association's members "don't get paid"1. Improvement
of conditions at neighbourhood level could help to redress that problem.

58
3.8 Holding the payments back: Fear eats the soul

I got trouble trouble

I been hiding all my days
Now it seems that trouble
Gonna put me in my lonesome grave
Bad Luck Blues Kokoma Arnold

The majority of participants in the study had less income than outgoing commitments.
Systems of priority for payments have been referred to elsewhere but they varied with
experience and over time. Food has first call in some cases but there are those who
starved themselves to clear debts So in this section we look at the plight of the indebted
person (or family) who has more repayment commitments than he or she can meet. Our
particular focus is on the consequences of indebtedness. This can range from stress and
arguments in the household to children refusing school. In one case a 10 year old child
became hostile and violent and is now undergoing therapy. The deterioration of physical
and mental ill health and the consequences of fear are located here within the debt
process.

The loss of control experienced by some indebted persons places incredible pressure on
their daily lives. Although the visits of creditors might be regular, their arrival is
unpredictable enough to create a permanent feeling of disquiet. The result is anxiety and
depression so severe that it forced several of the participants in this study to make
attempts on their lives. Earlier in the study it could be seen that despite Sean's level of
control he nonetheless was subject to extreme losses of temper, during which he
smashed up household items. In fact Sean refused to allow home visits of moneylenders,
only making agreements where he could pay at an office. All other participants in the
study suffered the knock at the door. Most came to dread it. Liam's spending priorities
were completely determined by the fear of violence from moneylenders. Trying to pay
off a £900 fine he felt he had little option but to approach a series of unlicensed
moneylenders.

Last week I had to finish up with my loan shark with a hundred pounds cash. And I had to pay
him. Four or five of them come up to the door. It was either pay or I wouldn't walk. I was trying
to pay them all off. The fella I had £400 off, I left him back one week and the following week I
had to give him double. And I got a couple of thumps. They're frightening enough - not easy
to deal with. There's no use to going to the Gardai!

When Liam was asked how he managed to pay all the moneylenders he simply replied
"Fear". Members of his extended family provide dinners for the children during difficult
periods and are generally supportive. But the history of indebtedness is damaging his
marriage and has contributed to two serious suicide attempts.

I got into money problems and I couldn't cope with it. I owed more than I had. There was
pressure to pay it and I couldn't. I took an overdose and slashed my wrists too, then went into
mental hospital, locked up in protective custody. I did therapy for a year after that. Then I had
a period when I was kind of OK but I'm back on anti-depressants at the moment because of
the bills.

59
In this study violence appeared to be an exception rather than a rule. It seems likely that
the threat of violence is enough to keep borrowers in line, as it does for Ann. Her
moneylending commitments account for £30 - about a quarter of her £130 weekly
income.

Oh they threaten you. The boy that used to do it is in prison for drug dealing and his wife does
it now. If she doesn't get the money she threatens me. She says she'll do this and do that and
pushes me. To tell you the truth I give it to her because I wouldn't like anything to happen.
The others are all right - they're all licensed. I'm on tranquillisers for nearly three years and I
was after taking an overdose. It made me ill for six weeks.

Although many stories of broken legs (and worse) circulate, this study found that the
level of violence appears to stop short of grievous bodily harm. Roughing up the client
with pushing, slapping and the odd punch is usually enough to ensure speedy payment.
But even that can be resisted. When Frances' moneylender, a close neighbour, died - it
was revealed that he was merely an intermediary. Although he had received the
payments and marked them off in her book he had never passed on the money to his
associate. Frances was then pressurised to pay a bill she had already settled. Despite
being slapped and pushed she refused to pay and the matter was dropped. But not
everyone is as strong-willed as Frances. And it doesn't need violent threats to make
people afraid. The hopelessness that accompanies indebtedness can be instrumental in a
deterioration of health and other social problems. Carol suffered from a series of
electricity cut-offs that proved instrumental in exacerbating her problems.

I had to put my children away (in care) because I had no way of cooking. I started to hit them
because I hadn't sufficient things to give them like. They were in care for 18 months - the time
it took me to pay. My youngest was crying for bottles and I had to give him sugar and water. I
was shaking him and telling him I hadn't it. And then he fell back on the stairs ...

Carol starved herself to pay off her arrears, burning everything in the house to stay warm
and watching TV hooked up to a neighbour’s electric supply. She managed to pay off
her moneylenders but recalls the pressure.

We only had the moneylender a while but we were going hungry to pay him. I thought I was
going to go mad. All these debts were on top of me - they put you under terrible pressure. I
put Windowlene on the windows and wouldn't answer the door. The children would hide
upstairs with me and I'd keep them all quiet. That's why I'm on tablets with depression. The
fear is still there. I get palpitations and I can't sleep even though I'm on 300 mg a night. I still
wake up wondering will it be all right tomorrow, will we be able to pay this and pay that?

Such are the effects of the inability to pay that mental health deteriorates and the home
became a prison. Isolation and pressure results in an inability to cope even through
manipulation of payments; the personal management system goes out of control. At this
point a crisis has been reached which may not be possible to resolve. The crisis
invariably brings immense family strain. This threatens to erupt into violence, reducing
the solidarity and capacity of the family unit to fight back.

My father and mother were on the Labour so when I was small I remember moneylenders
knocking on the door. In my mother's house or down here it just carried on. I'd keep the door
closed and hide from them. I wouldn't say I didn't have the money because I'd get
embarrassed. Then I got summonsed for rent arrears. I was literally going towards a nervous
breakdown. I went to the doctor and he knew there was something wrong and he put me on
nerve tablets.

60
In this situation, medication helps the indebted person to induce the illusion of coping.
The use of drugs to control anxiety and depression was consistently mentioned during
investigations, although some doctors encouraged smoking as a healthier alternative. In
fact, removal of the symptoms helped to extend career debt a little longer. By reducing
anxiety, medical practitioners delayed both the onset of emergency and minimised the
very real danger signals that alert indebted persons to the seriousness of the situation.
Our study suggests that in many cases a sense of shame causes patients to conceal the
source of their anxiety.

Evidence suggests that what follows is a period typified by either further strategic
borrowing or a period of postponement within which the indebted person merely waits
helplessly to see what will happen. In the later case, the indebted person then goes into
hiding - into hiding from the creditors, into hiding from the community and very often
into hiding from themselves. In consequence they cut themselves off and become
invisible to sources of support and advice.

Money advice practitioners can tackle this at two levels. Firstly they can work
collaboratively with health professionals such that early identification of problems will
result in referrals. Secondly, they can encourage the sharing of experience that helps
break down isolation. If indebted people can overcome their resistance to talking to
others about their experiences, it should allow them to overcome feelings of personal
guilt, and improve the collective mental health of the community. Evidence suggests that
community organisations are instrumental in helping people to surmount indebtedness
and this will be examined in the following chapter.

3.9 Dealing with help agencies

At various stages in the debt process, an indebted person will usually approach help
agencies for assistance with problem expenditure. Agencies might include state benefit
agencies, like the Health Board (usually referred to as "the Clinic"), voluntary
associations like St Vincent de Paul or Church bodies.

The experiences outlined here have enormous impact on the outlook of the indebted
person. Without question the generality of experience was that of inconsistency and
arbitrary treatment. Effects on the debt process were to inculcate feelings of resentment,
suspicion and suppressed violence - with a resulting hardening of attitudes and
increased cynicism. This damage to the individual results in a reluctance to deal with any
agency - money advice agencies included. But the damage to community relations
caused by disparities in welfare assistance is even more damaging. Motivated by a sense
of injustice, the perception of the self as victim increases the individual's isolation and
the possibility for community-based solutions lessen.

Liam's experience with social welfare left him with a sense of anger and frustration that
spilled over into violent feelings. Under threats of violence Liam had paid his
moneylenders and was left with no funds. With nearly £800 arrears and a similar amount
of moneylending debt he approached social welfare for assistance when his benefit
cheque did not arrive in time.

61
 The Clinic sent me down to him because I'd nothing in the house and he handed me £2 and
told me to get out. Now he wasn't a youngster or I'd a hit him a thump. He gave another man
who was with me £20. I know people that went to him and they showed me £500. St Vincent
de Paul is supposed to help out with bills. The Clinic's the same. It's degrading - they make
me feel like dirt. Where do you go? Who do you go to?

This experience has left Liam with a distrust for community initiatives. Our interview
was punctuated by a constant return to the incident, which bordered on the obsessional.
Liam views the world as one where other people are always more successful at getting
payments. This feeling of being "done down", of "not receiving his just deserts" had the
effect of blinding Liam to any service that did not involve an immediate cash benefit. It
leads some participants to evolve a theory explaining why they have been refused
assistance - where disparities in treatment are explained by appearance and lifestyle.
They claim that those who manipulate the system are aware of this. Thus it is inferred
that in order to plead poverty, you have to look the part. One participant calls this "living
in the dirt". If you refuse to live in the dirt and instead keep your house clean, your
children fed and lead an abstemious lifestyle you run the risk of being refused payments.
In the following case, a couple incurred a multiplicity of arrears, caused by disability and
setting up home. Whilst her husband was in intensive care, Christine engaged the local
counsellor and charity activist on the question.

I said, "To hell with you with your charity - you're all the same." He said. "No! Ask that woman
over there. She'll tell you they're very good". I told him. "They're out gambling and fighting 7
days a week and down the pub in the night time. They're the ones that get the free coal and
the vouchers. They're terrible the whole shagging lot of them." So he asked me if there was
some problem that I was in this state. I said, "I've only got £3 and I won't get paid until
Thursday. My husband's in the hospital and I don't know if he's going to be OK. I went to that
nun (my only time in my life going to anyone). I explained I had no pyjamas for Moira that had
buttons on them. She came back and handed me six odd buttons! That's your help. So you
can call into these whores every Thursday night and give them their free coal. And when
you've gone they'll be down the pub. The kind of help they give goes to the wrong people."

This lengthy extract demonstrates the depth of feeling held by indebted people in the
community - and it was a point of view articulated by most people in the study. The
indebted person considers herself part of a respectable community. Inside, the home is
kept clean and tidy and is improved - often this is the initial cause of debt. Outside lies a
world seething with corruption where misbehaviour is rewarded and moral rectitude
punished. Such stories circulate and there is no reason to doubt their veracity. Yet the
way in which they are articulated and elaborated elevates them to the level of urban folk
myth - like the story of the man who collected his unemployment benefit in a Rolls
Royce. The oft-repeated stories constitute an important part of the fabric of the indebted
subculture. The point is to rescue dignity from the midst of shame through the
construction of social reality, a comparative paradigm that regains worth for the self in
contradistinction to others.

Disparities did exist however. Some participants were able to discern a personal
difference in treatment. Those who had moved estate found it more difficult to get help.
Apart from the difficulties in re-establishing benefits for a new address, approaches to
different branches of the same organisation brought altered levels of payment. One
participant who had previously received regular assistance from St Vincent de Paul
noticed a change over time.

62
 I used to have it but they stopped. St Vincent de Paul only comes to people that live in the dirt
and the filth. They come to people in my street but they're out 4 nights a week. They doesn't
deserve it. Well I could live in the dirt and the filth if I wanted and I'd probably get more
money. I don't because I'm clean - I have a nice clean house. They look at you, you see, so
you have to look the part. That's what happened, because the dirt was coming up around me
like. I couldn't even see it! I was suffering from depression and I had no lights. They were very
good - they gave me £5 on a Monday night. I could go and buy butter and a pint of milk. 5
cigarettes and that.

Amongst our participants it was the less capable who were receiving more. Those who
were improving their position were more likely to criticise agencies and organisations.
As a person develops and gains confidence they not only look different, but sound
different. Their articulate manner may then work against them because they are judged
to be more capable. They have the same emergencies as the others but cannot persuade
agencies to assist them. As the system amplifies, what people believe to be real becomes
real in its consequences. And as people recognise how to play the game, the values of the
system are confirmed. This is a tough job for an advice service since practices are deeply
embedded in the culture of the localities, with resulting diminution in community trust,
friendship and support networks. Where those who have no strong community links
adopt this view, isolation becomes stronger and distrust extends to all agencies.

The study identified a tendency to regard all organisations as possible sources of cash
payments, and several participants were unable to differentiate between community
development organisations such as partnership and donation-giving charities such as
SVDP. This emerges within a framework of a dependent culture. Where low-income and
benefit receiving households are the norm, the cultural expectation of charity as a right
emerges. This is not to say that people are not entitled to benefits but that popular culture
demands that SVDP operate as a government agency might. Participants who ask that
SVDP operate a means test are asking for a religious charity to be subject to criteria
applicable to state benefit bodies - with all that this implies.

3.10 Conclusions

This chapter has looked at the consolidation of debt within households. In particular it
has examined the pattern of career debt - from home-centred debt acquisition to reliance
on week-to-week borrowing. Once debt is consolidated and the process of career debt
under way, breaking into the social world of indebtedness from outside is a difficult
undertaking. Isolation and home-centredness is at the same time a coping strategy and a
barrier. Participants in the study viewed most people "outside" in an adversarial manner,
building up distrust, bordering on paranoia. In this world they cast themselves as
undeserving victims, battered by the vicissitudes of life.

The study observes serious repercussions, not only for neighbourhoods and communities
of which indebted people are part, but also for the agencies that are in a position to
provide assistance. In "victim mode", people are waiting to be helped. But their passivity
breeds a destructive specularity of observation without participation. Helpless and afraid,
they feel powerless to intervene in what seems to them a set of unfair practices that
merely reward those who play the system. Outreach work can assist in breaking down

63
passivity through targeting and sponsoring community activities within which issues of
indebtedness might be explored.

Rent collectors are placed in an uneasy position as direct doorstep collectors. They
become the first target for hostility and break downs in the relationship between tenant
and rent collector can quickly ensue. The study recommends that the money-advice
service, partnership and the local authority examine the variety of options for rent
collection. Arrangements for deduction of household income at source offers a practical
option, and at the time of writing a new Household Budget scheme may offer dispersion
of welfare benefits through the Post Office.

Some participants requested advocacy services to release them from the pressure and
stress of making claims. However, generalised professional advocacy can serve to
reinforce the passivity of those who are indebted. Whilst time-consuming, it may be
possible to train lay workers as "friends" to accompany claimants. In this way the system
becomes more organic, and can help to increase activity at neighbourhood level. This is
more likely to be effective if agencies acknowledge lay workers as fellow professionals.
Through the development of these mechanisms it may be possible to create support
groups within the community. These can function prior to more traditional top-down
rescue attempts with which social agencies are more familiar, possibly pre-empting the
crises that produce eviction notices and court appearances.

The study therefore recommends the development and extension of use of volunteers
and lay advisers, not only to undertake outreach work but also to serve as friends who
could accompany indebted people who wish to make their own approach to agencies.

Benefits, emergency payments and voluntary donations in kind will clearly continue to
function for some time. But St Vincent de Paul and similar charities could ensure that
fair practices exist without compromising the flexibility that its voluntary status confers.
Money advice workers can work in partnership, not only through receiving referrals but
also by referring clients for help. In this way, it could help preserve a route into the
system that some apparently find barred.

As we saw in Chapter 2, state agencies responsible for emergency payments need to

become more "transparent" - that is, it ought to be possible to see exactly how they work,
and by what criteria. It should specify the code of conduct to which emergency payments
adhere. State agencies too should work in partnership with money advice services and
provide clear routes for referrals. Here, partnership working is ideally placed to facilitate
new systems.

Obviously, practical changes can be made in the way in which utility arrears can be
collected. Indeed on some estates in Loantown these are already under way and are
becoming more user-friendly. Moneylending account collection is a more problematic
area, although the new Consumer Credit Act may partially resolve problems of
victimisation and intimidation. However, in terms of availability and accessibility of
easy credit, the informal manner in which unlicensed moneylending takes place presents
considerable difficulties. Here a community response, however onerous the task, appears
to offer the only solution. The study recommends that partnerships explore opportunities
for a high-profile campaign against unlicensed moneylending.

64
CHAPTER 4. Getting out of debt

4.1 Overview

The response to indebtedness is uneven and depends on several inter-related factors.

Determination, support structures, community participation, advice services, training and
employment and chance can all play a part. In most cases a combination of these factors
conjoined to boost the hope and expectations of people who were looking for a way out.
"Looking for a way out" is an important caveat. Those who could see no hope and
merely envisaged a continuation of their present indebted position tended to avoid
solutions. Finally there were those whose isolation and lack of awareness limited their
vision and left them at the mercy of prevailing circumstances.

This chapter therefore deals with the process of overcoming debt rather than its
elimination. The study takes place within the context of a newly launched scheme for
those in debt. In partnership with the Health Board and the Credit Union, partnership
money-advice service helps people cope by helping people to organise their money and
bills. It makes arrangements with agencies and creditors to reduce repayments to realistic
levels, and to disperse these funds through the Credit Union. Most participants in the
study were aware of this scheme if not actually taking part, and for many it was the
means by which they were tackling debt. The study took place as the special accounts
scheme began, and experiences recounted here offer an initial assessment of the start of
the scheme. In this section we will also look at the kind of perceptions that stand in then
way of the scheme's success and suggest ways in which obstacles might be overcome.

This chapter also critically examines the role of the courts as a crisis point in career debt.
It details some of our participants' experiences, but suggests that the courts are in a
position to offer a constructive and positive mechanism for getting out of debt.

Key events played a significant role in motivating to overcome indebtedness. This might
take the form of the possibility of eviction, a comparison with a neighbour, something
that happened to the children. The event disrupts the taken-for-granted world in which
everything goes on "as normal", providing a spark that changes the perspective of the
indebted person. This will be examined as part of a combination of factors that provide
the scope to tackle the problem. In attempting to provide some means of locating the
way in which this process takes place, the author has utilised a theoretical concept
known as epiphany, which occurs in problematic situations where people both
experience and confront a crisis. The objective here is not to develop a new way of
looking at the world of indebtedness, but to provide some insight into the whys and hows
of certain processes.

4.2 Introduction

The study's participants fell into four segments. Those who:

(1) were in the process of eliminating debt in its entirety.

(2) were overcoming debt but were pessimistic about outcomes.

65
(3) were still coping in career debt.
(4) were not coping with career debt.

This part of the study focuses on the first two categories, particularly existing good
practice. It examines the perspectives of those who are indebted but whose position is
more static. At a general level it reviews the opportunities available to people who are
indebted and offers some scope for engaging with those who are sceptical or unaware of
the possibility of change.

4.3 Community activity: Getting out the house

There can be no doubt that participation in community organisations offers the most
scope for overcoming debt problems. It breaks down isolation, increases awareness, and
provides a social context within which support is available. The study suggests that those
who can find their way into voluntary work, education or training or paid work within
the community centre have a better chance of success. Even a community service order
made as an alternative to a custodial sentence can help to break down the barriers
between the indebted person and the remainder of the social world. It emerges from this
study as the single most effective feature in the process of overcoming debt. But how
does this work? If people are isolated and lack confidence, how do they get out of the
house and into a group? How do they get through the door of the community centre or
resource centre? There are no simple answers to this question and the genesis of social
action in neighbourhoods is far from clear. Yet groups do emerge to meet local need and
even if only for short periods provide a focus for people at a neighbourhood level.

Contact with centres obviously made a wider range of information available to visitors
and the presence of a busy community centre increased the activities available to
residents. Where rent collection took place at a centre, it drew people into an
environment likely to offer opportunity. Certainly those who had participated in groups
or courses exhibited a forcefulness and a sense of direction that seemed to elude others.
A combination of support from friends, advice from agencies and participation in a
group helped Katrina to begin to overcome debt. But it was contact and talking through
problems that gave her the courage to start eliminating her debt commitments.

Things were building up and I needed someone to talk to. An advice worker told me about
making arrangements. I think I strengthened then, and made a conscious decision and effort
to get out of debt. The group is great - It's moral support. Sit and talk - or listen actually. It
doesn't take away the problem - you still have to take a hold of yourself. But it's a weight off
the shoulders when people understand. I might even give advice because it happened to me.
Most of my close friends give support. They understand. My friend made me look at myself
and she helps me to keep to paying the bills.

The realisation that finances were out of control forced Katrina to start talking to others.
When social interaction increased she discovered that she had problems in common.
With the help of a strong support network she commenced economy measures and
through tight budgeting reduced her four moneylenders to two. Although she anticipates
another two years of subsistence budgeting to clear all her debts she is optimistic about
the future. She hopes that the part-time job gained as a result of her voluntary activity
will help her reach her target. But Katrina relies on the help of friends for success,

66
particularly her best friend who "marches her down to the ESB office" on receipt of her
benefit. Thus her solutions are exclusively community and neighbourhood based.

For Margaret, work experience in the local community centre opened up the possibility
of overcoming indebtedness. Since the loss of her job as a result of pregnancy
confinement and subsequent separation from her husband, she had acquired multi-debts.
She had continually applied for training courses and eventually secured a temporary post
with the help of a Social Assistance grant. Margaret quickly took advantage of activities
within the centre.

Budget Sheet D: Getting out of Debt

Margaret: I kind of picked myself up. I had to go around each person. They asked me to pay
each week and a little more to cover arrears. Before you know, you've paid off your arrears and
I'm just straight now. This work is doing me good but what I'm going to do when I come out of it, I
don't know.

Before her marriage ended, Margaret was forced to live with domestic violence and mounting
debt. Still caring for two young children, the separation posed her further expenses that she
couldn't meet. Extra income and the supportive environment of her FAS course have helped her
clear arrears and maintain current payments. Although she is more optimistic about the future,
she feels uneasy about future job prospects.
___________________________________________________________________

INCOME
Deserted wife’s benefit 92.00
Children's allowance 15.00
Fuel allowance 5.00
FAS training allowance 57.00

TOTAL INCOME 169.00

OUTGOINGS Arrears
Rent 8.00 cleared
Electricity 15.00 cleared
Solid Fuel 10.00 -
TV HP 6.00 -
Food 40.00 -
School lunches/fares 10.00 -
Travel 7.00 -
Entertainment 4.00 -
Credit Union 20.00 2,000.00

Moneylenders:
1. 20.00* 600.00
2. 6.00 -

TOTAL OUTGOINGS 144.00 Total arrears: 2,800.00

In the aftermath of her separation, Margaret's concern to create a pleasant home led her to
borrow £3,000 from the Credit Union - a debt which is now more than three years old. She is
gradually reducing this loan and has halted payments to moneylender No. 1* without
repercussion.

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Margaret used to hide from the moneylenders. Now she is saving for a car through the
Credit Union and hopes to run her own business in partnership with a fellow worker.

Working here was the best thing that ever happened to me. When I started I learned how to
get out of debt, and I think having the job itself gave that bit of boost, more confidence in
myself. I started doing the classes here, and getting an interest again in my life, doing the
things I wanted to do years ago. It felt good to hear someone say you're doing something right.
When the teachers used to come down for a coffee I'd ask them questions about what they
taught. I'm always learning everything they do here.

Although Margaret feels that it is very difficult to "pick yourself up" when unemployed
it was through her contact with the centre that Margaret began to explore ways of
reducing her debt. It reduced her isolation, widened her horizons, giving her the
confidence and ambition to embark on a new venture that will be community-based.
Similarly, training courses mounted by FAS helped two other participants in the study.
Both had suffered permanent effects of anxiety and depression, originating from
domestic violence in previous relationships. So the range of work activities and
emphasis on social skills development proved excellent therapy. It was through the
training supervisor that Carol was introduced to the special accounts scheme.

I love meeting people. I get very depressed all day at home, sitting down all day. I love to
meet people and talk! Our co-coordinator is good like and she recommended the Credit
Union to me. I haven't the hassle of all these people knocking at the door now. Getting
evicted or getting your light cut.

The course not only ended her isolation but also opened an arena within which she could
safely explore the trauma of an horrific ex-marriage in which she was subject to constant
abuse. Now she feels confident enough to talk in meetings to others who have the same
experience. But although she feels that the course has picked her up, she fears the loss of
income that will accompany its completion. So too does Linda, for whom the passage to
overcoming debt is still a little rough. Linda too suffered from a violent relationship. The
aftermath found her in debt, isolated and afraid. Her isolation is typical of the home-
centredness examined earlier, and turned her inwards to the extent that she borrowed
£3000 from the Credit Union to improve her house. Unable to pay she began to hide
from her creditors.

I never went for help because I had too many problems in the home I was so ashamed. My
husband threatened me so much and it left me with so much fear in me, I believe there was a
time when he would have killed me if I had told anyone. It was a lady I knew at the Bingo got
me out to apply to the FAS. She was doing a cleaning course. I put my name down and I
came down and asked. I've never looked back. The supervisor has been so open. She's a
great listener. We have different things - computers and someone coming in for a chat and
yesterday we had sex abuse. Letter writing. It doesn't affect my benefit and I meet loads of
people here.

From a position of considerable debt Linda gradually cleared most of her arrears with
her increased earnings. She knows that the work is doing her good but expresses unease
about the future when her course finishes. Although she anticipates that a drop in
earnings will cause a major problem, her loss of a social environment could prove to be
the critical factor. One of the problems about a centrally based course is that cannot
provide the local support structure within which graduates can consolidate their
increased confidence. Linda still cries a lot and feels lonely and depressed. When she
completes her course she may remain as vulnerable as another participant in the study,

68
who improved her position substantially only to slip back into debt on the completion.
When Carol, Linda and Margaret complete their courses they will need support within
the community to complete the transition to financial stability.

Moving to a different arena, in which a community service order substitutes for a

custodial sentence, organisations often find themselves in charge of an unwilling
volunteer. Yet Liam found this to be a most rewarding aspect of his brush with justice.
As caretaker of a Loantown voluntary organisation he feels he plays a useful part in the
community sector. He is able to take advantage of activities, and although the terms of
the order restrict his attendance on courses he is beginning to display a comfortable
grasp of personal computers. With a history of multi-debt and deteriorating mental
health, his "job" may be crucial to his recovery.

When I was working I used to have umpteen friends as such. Now there's not one left. My
only social life at the moment is coming to the Centre on this Order. I'm employed as a
caretaker here but I'd like to get into computers so I'm hoping that I can go back to school
after Christmas. It would be good because if I don't get the use of my hand back, there's no
way I can go back to my old trade. I know the centre helps people to sort things out, but even
if I get training I'm still not out of debt. I still owe £700!

Liam recognises the value of the centre and the opportunities offered. It remains his sole
access to a social life that has dwindled since his accident and subsequent job loss. His
hope is tempered by the large amount of debt that dominates his life. Ironically, his court
sentence has offered him a space to tackle his problems; since then he has not fallen prey
to the bouts of disappearance and sleeping rough to which his depression makes him
prone. He is optimistic about the future but feels antagonistic towards help agencies that
he typifies as "degrading".

All these case demonstrate the value of courses, training and community involvement.
Here, involvement at the local level produced more optimistic perspectives from
participants because the support structures are not automatically cut off - as at the end of
a course. It also demonstrates the need for a holistic approach to indebtedness. That
moment when the increased income is cut off is also the moment at which the social
involvement is reduced. In order to maintain the momentum of overcoming
indebtedness, networks at a local level have to be in place.

An advice service can operate in two directions. Firstly, it can usefully assess the whole
family, looking at opportunities for training and community involvement. Clients may
then be referred to appropriate courses. The financial incentive of a paid course can be
attractive whilst the social environment will help to break down isolation. Secondly, the
advice service could monitor the progress of clients with particular reference to
completion of courses, such that an interim interview could be arranged. The focus here
is on prevention of secondary isolation, consolidation of gains made through initial
training referral. A more holistic approach may demand an extension of the initial
money-advice interview to include an assessment of the particular problems and interests
of clients. This may help to break down the labelling process to which the client is
subject in reaching career debt. If the interview concentrates merely on indebtedness it
may have the unintended effect of confirming the client as "an indebted person" - the
label that we wish to remove! Clients may be encouraged to participate in community
activities most appropriate to their lives. Gingerbread for example has proved crucial in

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provision of mutual support and self-help for lone parents. Here, breaking down isolation
may have a "community health" spin off.

4.4 The illuminative moment: Key events on the road to Damascus

The crisis that causes the indebted person to embark on a new path may be as a result of
accumulation of experience. Things build up until she can tolerate no more - the
cumulative moment. Yet often it is a single event that makes everything clear. In this
study several participants made specific mention of an event or something someone said,
which caused them to reflect, review their lives and embark on a new course of action. In
a world where television, radio and the press broadcast an almost seamless stream of
information, it is easy to forget the power of first-hand knowledge of events at a local
level. Close enough to see and to hear creates an impact out of proportion to its
importance. That which is globally unimportant may be locally significant. At the
moment when the person confronts a crisis, a public issue affects the world of the
private. So when Deirdre witnessed an eviction it proved a scary experience that played
a part in changing her life.

When my rent was £9 and I only had £10 in my purse I used to say, "Sod the rent man".
Before I was very ignorant about it. I didn't care about the rent. I thought they never threw you
out - but they do! A woman down the road was thrown out with 9 children. When I saw that I
thought "Oh Deirdre! If they can do that to that kind of family they can do it to you!" My sister-
in-law was thrown out of her house. She had 12 children and was expecting twins. Now
they're in trailers and they only owed eight hundred pounds. I wouldn't know where to go. My
children and my rent - I don't care about nothing else.

In the home-centred world of the indebted family, eviction presents the worst threat. An
electricity supply can be cut off and restored, but there is a sense of the irreplaceable
about a home. The symbolic importance of the home renders its loss more traumatic than
losing accommodation. A home has a history and comprises a set of relationships.
Through over-committed borrowing to finance furniture and home improvements,
Deirdre nearly sacrificed her home on the altar of its contents. But here a public issue
transcended her personal world1. That moment of illumination caused by the prospect of
eviction allowed her to reflect and contributed to her efforts to overcome debt. From her
indebted "vantage point" she looks back to see how she got where she is now.

A family crisis helped Carol to begin tackling problems that she had attempted to
suppress for years. Suffering domestic violence at the hands of her first husband
contributed to her inability to cope with bills, and she resorted to moneylenders for
everyday spending. Both she and her eldest child became violent in consequence and fell
into conflict with the neighbours.
I had this thing of violence a few years ago. A lot of things got me mad and when these
fuckers came to the door I got this urge just to hit them. And I had black outs. Then I
started battering my kids, because I had been battered too. But it was the last straw when
I shook my baby on the stairs.

This proved to be the key event, the illuminative moment for Carol. She asked for the
child to be taken into care and starved herself to repay her electricity arrears and the
moneylenders. It was the start of a long road to recovery in which writing about her
experiences played a major part. The sequence of events that followed - a new

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relationship, FAS training - contributed to her development. Although she still feels
traumatised by her past, her debts are now manageable and her home life stable.

If home becomes the key symbol in the life of the indebted family then children lie at its
core. They can embody the frustrated aspirations of parents who are determined to see
that their problems should not afflict the "normality" of childhood. The notion of
childhood is instrumental in sponsoring considerable expenditure. Deemed to be a time
of innocence and pleasure, the ideology of childhood legitimates a wide range of
spending. From discotheques to designer labels, adults agonise over their inability to
provide what is correct for the time. Hence the inculcation by the child of the adult's
outlook causes dismay. When the outlook of the adult and the child begin to mesh, the
indebted person is made aware of the connection, provoking generalisation to a wider
view. In this case, the cumulative moment came as a build-up of stress, caused by her
inability to pay the moneylender. This resulted in Theresa hiding from his calls, but
when her child subsumed her outlook and articulated her fears - using her own words -
Theresa was forced to make connections with her own childhood.

It was one of my kids. She said, "There's Maxwell!" (moneylender) It came out just like that! I
said, "This'll have to stop." She was getting used to hiding like I did as a child. Something
clicked when she said that - and it reminded me of my mother hiding behind the door.
Threatening letters and getting dragged off to court for rent arrears and all that.

Two words alone, "There's Maxwell!", were sufficiently cathartic to promote a change in
Theresa. Through the child she experienced a relived moment. At once the human
implications of her indebtedness became clear and it was possible for Theresa to define
this in terms of consequence, of outcome. In this way she was able to confront the crisis.
This confrontation has to come from the self. In the following case, Sheila's experience
shows that even with professional help it is possible to miss crucial information.

The kids would ask for money and I would say "I haven't it I've got feckin' bills up to here!" My
eldest lad was a very bright child in school and his work just went down. When he was 8 he
chopped up the furniture with a carving knife. On the same day he went out on the front
playing. Some lad didn't agree with him and he took him by the throat. A neighbour ran in.
"Robert's outside and he's like a dog!" When I went down there was froth coming from his
mouth. Something was really wrong, and the child psychologist had an awful lot of chats with
him.

This serious incident was the result of a series of problems. The first was the violence
and desertion of Robert's father. The second was the increasing indebtedness and
consequent stress within the family. The incident provoked the intervention of the
authorities. When asked if debt problems had been discussed, she replied that they had
not.

No they weren't discussed. She said she was there for him. There was a social worker
appointed for me. When I had the nervous trouble. She became a great friend. But she'd ask
how I was managing with my money and I'd say not too bad. She was there mostly for me.

Through neglecting to approach the family as an integral whole, both professionals

missed the root cause of what they probably believed to be personality disorders. They
could have generalised from the crisis and through family casework made the
connections between debt and disturbed behaviour. In social work parlance, they
substituted the "presenting problem" for the real one. By failing to ground the crisis in

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the context of family problems, they also missed the opportunity of tackling the issue
and exploring family solutions to indebtedness. Social work and medical professionals
represent a potential source of referrals for a money advice service. But to be in a
position so to do, they need to penetrate below the level of appearance. The shame and
guilt referred to by almost all the participants in the study prevents them giving full
information. Casework has to find a way of overcoming that barrier. Additionally,
professionals need to begin to work in collaboration with other specialists for the good of
their clients. Where a debt problem is clearly responsible for psychological problems,
domestic violence, baby battering and so on this should, with the permission of the
family, be referred to the money-advice service.

How can the money-advice service and partnership use these moments of crisis to assist
clients? Clearly the key event that alters an indebted person's perspective cannot be
engineered. It may however be possible to tackle this in an instrumental way.
Participants in the study have mentioned feeling that "it can't happen to me" -
particularly in the case of evictions. Here we are attempting to penetrate the world of
career debt, prior to its collapse into crisis. Through the provision of information;
through the collective experience of the community; through personal stories and
narratives at the local level, a social initiative can engage with a section of the population
that would not otherwise feel drawn to seek help. Thus as part of a generalised strategy,
it may be possible for a communications initiative to utilise popular culture in getting
across basic messages to indebted people. In this way the experience of those who have
overcome debt need not be hidden or lost. It can thus play a part in breaking down the
barriers behind which indebted people hide, and help reduce the sense of shame which
prevents them seeking advice.

4.5 Experience of the Courts: "Here comes the judge"

The experience and practice of the courts has an ambivalent place in this report. It has
been located within the chapter "getting out of debt" because it offers a framework
within which this is possible. Yet more often than not it fails to maximise its potential in
offering solutions. For the individuals and families under study it represented a gruelling
experience. Usually associated with rent arrears and evictions, a summons to appear in
court was frequently ignored. Rather than use the court as a negotiating arena within
which to control the level of repayments for arrears, participants would ignore the
summons and fail to appear. Agreements would then be made in their absence, which
they could not meet. This problem is not uncommon. In a recent report, Berthoud
comments "It has always been a matter of concern that courts set the repayment levels
without considering the defendant's ability to pay". In this study it is revealed as a delay
process, since in either case the tenant could not meet repayments. The sequential
process of summons and enforced agreements would result in delay, since either way the
tenant could not meet repayments.

But for some, the courts - or at least the summons to appear - proved a turning point in
career debt; the illuminative moment which led to reflection and change. Again this
worked within the context of a threat against the home. The power of the courts is
recognised as formidable. Yet Theresa, who was brave enough to go through the
process emerged with a rather better outcome than she had first envisaged. It was a letter
threatening court proceedings that first forced Theresa to the door to make an

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arrangement with her moneylender. Hard on its heels came a summons for rent arrears.
The cumulative effect was to make her ill. Pointing to her head, Theresa recalled:

"It was getting too much up here (in my head) to carry around. My nerves were shattered …
the doctor said you need something - a relaxer. I ended up in court anyway ..."

Theresa chose to go to court and explain her case.

The judge said "Why aren't you paying your rent?. I said, "It's as simple as this. I just don't
have it. It's been one bad year and everything is coming on top of me. It's time for all the big
bills to be paid and the rent's getting sacrificed.” He put an order on for £20 a week. If I failed
to pay, the eviction would come right away. I was sitting here paying £20 a week and it was
crippling me. But it had to be done. It was an order.

In making the order the court changed her order of priorities, reclaiming the rent money
for the Local authority. Inadvertently it sharpened Theresa's crisis and brought a solution
closer. Theresa is now with the Special Accounts scheme and ironically paying much
less than was demanded by the order. But this positive effect did not represent a focused
attempt to reach a realistic solution. Theresa was adversely affected by the publicity
surrounding her case. It increased her shame and guilt and revealed her situation for the
first time to her neighbourhood and her parents.

I was so ashamed. There was people that knew me saying "What are you here for?” "For a
TV license." I said. I didn't know how it worked in court. This fella roared my name - and all
these people were standing there hearing my case read out. My address, what I owed, how
long it was since I paid any money. All these people looking! It was an awful thing to happen.
Your affairs were made public. You go round with your pride and keep it to yourself. It's my
business, not for public knowledge in the streets. So I came back to my street and everybody
knew I was in court, how much I owed and that I was nearly evicted. It doesn't help. For those
kind of things the court should be cleared and just the person should explain their case.

Shrouded in silence and cloaked with pride, the world of career debt is typified by
"keeping up appearances". The court process shatters this sphere. In a sense the indebted
person is "outed", forced from the closet. But the movement from the private to the
public world of the court can have a negative effect in the indebtedness process. The
labelling process which publicity in the courts necessarily entails, confirms the
defendant's status as "indebted". Revealed, stigmatised as a person who cannot cope, the
indebted person falls back on comparisons. An appeal is made to a broader justice, to
comparative fairness. But in the process of reclaiming some moral high ground, the
indebted person becomes victim within the community.

I see people who just couldn't care less, but there's genuine people like me there - they know
from my records that I was a good tenant. Anyone else that got taken to court they got a
warning first. There's a blue letter and the white letter system. White letter and your off to
court. Blue letter you got some grace and you can go and see them and make an
arrangement. I just got a white letter. I was £420 in arrears at that time. I heard about a
woman who owed about £1000. My God - it's an awful lot to me!

Here again we enter the realm of mythology. Stories about toleration of massive arrears
become elaborated, re-worked within a distorted time frame where information is
dragged out of context. Here, changing approaches to those with arrears are not
acknowledged. So in order to re-invest the family with a sense of pride it feels the
necessity for comparisons. Through conceptualising themselves as "victimised", barriers

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are erected between indebted persons themselves and between indebted families and the
community. Yet it was the relationship between Theresa and the community that
salvaged a positive outcome from this process. Voluntary work within the community
changed Theresa's approach to authority, equipping her with the language and
confidence to deal with the Local authority and the courts. It also gave her access to
information about the Special Accounts initiative.

Things were going downhill. I thought if I just sat here and did nothing, things will go from bad
to worse. It wouldn't be any better next year or the year after that. But they can't get away with
evicting you and leaving you. There's a way of dealing with them - they can't just walk all over
you, treat you like dirt and leave you. I think it's better knowing how to confront a statutory
body like the Loantown Local authority, being able to handle these people ... but my
neighbour though - she'd shy away from people like that.

Those who were withholding rent over repairs had become used to producing letters
from doctors and TDs for the attention of the judge. This resulted in the case being
postponed until the matter had been rectified. The deadlock between rent-withholder and
Local authority produces another kind of stasis, marked by ever-increasing arrears and
punctuated only by occasional shuttling to and from court. For Sarah this deadlock was
broken at the stage of the fourth summons - through her non-appearance at the court.

Twice I got help and gave them £200 (the rent man put me wise because he said they would
evict me). But no-one would pay £16 a week for the place. I thought they wouldn't put me out
but I got frightened. I offered £30 a week but it was too much and I dropped it. I was brought
up to the court again. I went before the judge and he asked me why I didn't pay my rent. I told
him about the state of the house, how many children I had and that my husband was
unemployed. He thought that my rent was wrong and could I pay £12 a week. But I was
called to the court again but I got the day wrong so I wasn't there and I got an eviction notice.

In her anxiety to please the court our participants showed a tendency to offer unrealistic
sums, which the court showed an equally unrealistic inclination to accept. Even when
her repayments were reduced Sarah couldn't maintain them. With the worry of £2500
arrears amassed over 4 years, she looks pale and gaunt with worry, her face ravaged by
eczema. The constant anxiety of impending eviction has caused weight loss and
exacerbated her husband's bronchial problems.

The girl came to my house and said you have to be out in the morning. We're taking the
house back off you. The Town Hall couldn't give me the date to leave the house but they said
we won't evict you before Christmas. I tried to explain that I was trying to set up something
with the Credit Union so the girl said she would come and see me.

Crammed in to a two bedroom local authority house with a family of six chidden aged
from 4 to 18 years, it's a struggle to survive. Threats from her moneylender ensure that
Sarah pays £120 from the weekly family income of £160. The severity of her case has
now brought her into contact with the Special Accounts scheme. So is there is a chance
of stopping the eviction?

I was talking with (money advisers) and I asked if there was a chance for my rent to be fixed
and I not to have moneylenders. After Christmas I want to ask the town hall to take me out of
this because I don't want to be risking the moneylenders. Where I lived before I was paying
less rent and I felt a big difference after a few months. I asked for a transfer. I'd prefer to go up
there where I was before.

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One feels that without the crisis, this case could have extended. Hastening the
intervention of the money-advice service at least gave Sarah the option of joining the
Special Accounts scheme. The action of the courts here is only to meddle inefficiently in
the debt process. It has the power and the capability to intervene, but often it serves only
to consolidate career debt. Where people borrow to meet unrealistic agreements, or to
pay extravagant fines they become locked into a system of priorities that benefits
everyone but themselves.

Observation of the Loantown court revealed a system whose process owed more to
bureaucracy than to justice. Pressure of cases constrains it to get through its business in a
speedy manner - avoiding a backlog of cases. Where those summonsed fail to appear,
the court speedily agrees the requests of the plaintiffs. The courtroom blurs into a sea of
bobbing heads and curt nodding which appears impenetrable to the outsider. This
impenetrability is in one sense a celebration of its own importance, within a system
where justice is set aside in favour of social control. This social control forces those who
are so processed to evolve an explanation for inequity - where the courts are typified as
arbitrary, vindictive, in league with the Local authority and so on. Those who screw their
courage to the sticking-post and brave the court itself meet a system that is not geared to
open communication. Gaining access to the courtroom is in itself fairly bewildering.
Those who work in the court system and who are at ease with its conventions may be
unaware of its alienating effect. Yet there are those who argue that it this is precisely the
intention - to impress magisterially; to make aware of the seriousness of the occasion; to
convey the power of the state. Add to this the visibility of the court - the public
revelation of debt - and it is possible to understand the reluctance of those summonsed
for debt to appear at all.

Yet the court offers an opportunity for change. It offers a forum for realistic arbitration in
which debt cases could be examined dispassionately. Cases heard in private chambers
would be less frightening and less shaming. Social reports could be called for, budgets
discussed, tests applied, referrals made. Where unrealistic agreements are going to be
financed by moneylenders, the court merely ensures debt recidivism and further damage
to the community. A special court that dealt solely with arrears, held in camera, would
repay its cost in the improved health of the community. And in the case of credit default,
the court does have the power to reduce rates of interest that it regards as unreasonable.1

Elaine Kempson and Richard Berthoud have suggested alternative arrangements.

Following the Courts and Legal Service Acts (UK) 1990, it is possible to substitute
paper disposal hearings which takes account of the defendants ability to pay1. Thus
Loantown Court's time-consuming process of summons and arrangements observed by
Stuart Stamp1 could be rationalised. This alternative requires statutory change, yet
represents a realistic and considerably cheaper option. A note of caution is necessary
here. The view that open courts ensure public scrutiny has some credence. Yet the issue
of arrears lies in civil not criminal law. Basically we are discussing a failure of contract
where the court must arbitrate fairly, and should continue to strive to offer consistency in
judgment. Its criteria for judgments must be open - as should that of the Local authority
in deciding who shall be summonsed. If citizens sense an irrational housing procedure,
they should not be blamed for trying to both comprehend and explain it in their own
terms.

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The issue of agreements remains. Agreements must be realistic and should reflect the
defaulter's ability to pay. In Norway, Sweden and Finland for example, a judge has the
power to adapt credit conditions to the social conditions of the unemployed1. The
arbitrary nature of arrangements can be challenged through a rational analogy. If the
individual debtor became bankrupt, all his/her assets and liabilities would be taken into
account and order placed upon remaining finances. This is hardly a privilege but at least
it represents a rational approach. The courts must consider allocating extra resources to
this serious problem. Social welfare organisations can then work together with the court
in building a community-oriented strategy that minimises the serious damage cause by
low-income and unlicensed moneylending.

4.6 Credit Unions

The role of the Credit Union is subject to special attention in this study. In conjunction
with the Health Board and partnership it helps people to overcome debt through a system
of controlled payments. Debt counsellors assess the budget of a person in difficulty and
agree with that person what realistic sum can be allocated to debts, including arrears in
payments. This sum is then paid to the Credit Union on a regular basis for distribution to
creditors. The Credit Union undertakes the administration of payments, whilst clients
revert to "normal" payments, paying their standard rent and a manageable sum towards
arrears. A major feature of this scheme is that the Credit Union assumes the
responsibility for dispersing a reduced, often nominal sum for moneylending debts. This
releases the indebted person from the social as well as financial pressure of paying this
kind of debt. The collaborating agencies are responsible for informing the creditors -
ESB, Local authority, and both licensed and unlicensed moneylenders. The latter are
forced to deal with a neutral and authoritative institution where threats have less
credibility.

This section examines both the experience of this scheme and popular perceptions of the
Credit Union whose 13 Loantown branches cater for more than 40,000 members. It is
widely assumed for example, that the middle-class image of the Credit Union limits
success of the special accounts scheme. Yet for several participants in this study the
Credit Union was already a creditor - a major creditor in one case. The Kilcurragh
branch - which covers Mayfield, a major estate in this study - has commenced default
proceedings in 135 of its 9,000 accounts. Since the more affluent Carnegie branch in an
adjacent ward is currently free from legal proceedings, we can conjecture that default is
concentrated in welfare-dependant areas. Indeed the largest single factor preventing
participants in the study from seeking this kind of alternative was previously existing
Credit Union debt. Those who could afford to fulfil membership criteria through a
period of regular saving, had already integrated the Credit Union into their network of
creditors. The Credit Union thus became part of the pattern of financial management
within career debt.

The study has already drawn attention to Katrina's experience. This shows how easy it
was for the Credit Union to become inextricably laced into the web of neighbourhood
credit and debt. Prior to their separation Katrina and her husband saved and borrowed
from the Credit Union as part of their coping strategy. Although it was part of a network
of debt it was manageable. When Katrina took over responsibility for the Credit Union
she continued to borrow but the system would no longer cope. She fell into arrears so

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when she approached the CU for help with her backlog of ESB payments she was
refused and advised to make an arrangement. Ignoring this in favour of a moneylender
made matters worse. Sufficiently pressured, she approached St Vincent de Paul and was
assured that it would clear her CU debt. But the charity failed to fulfil its promise,
causing the Credit Union to feel "messed around". So Katrina feels that a solution
through the Credit Union is now closed.

In this way the Credit Union becomes integrated into the world of career debt as another
creditor and another worry. Within this network it is possible to ignore the social
motivation of the Credit Union and treat it just as instrumentally, even manipulatively, as
any other creditor. Isolation and marginalisation fragments the population of indebted
families, breaking down solidaristic bonds within the community. As a result of this
process, the Credit Union finds its social aims and aspirations subverted. Rather than
being evaluated in terms of its potential it is assessed in terms of strategy within career
debt. Ann relies on tapping into her daughter's membership for electricity arrears - and
when Dolores was asked about her moneylenders she replied, "Do we count the Credit
Union?” Stripped of its welfare ideology the Credit Union becomes another
moneylender, a factor conceded by the Credit Union itself. "It was known as the Bank
with a Heart, and perhaps we had too much heart. We went too much humanitarian".1

In one Credit Union Scheme, hard-core defaulters were known as "vindictive

delinquents". This attitude affects members' propensity to seek advice or further help. In
Linda's case for example, the Credit Union had become a major creditor. After she and
her husband separated, her desire to create a nice home led her to borrow from the Credit
Union for double-glazing. Now only one amongst a number of commitments, the Credit
Union no longer seems to offer an opportunity for overcoming indebtedness. A similar
experience restricts Dolores. When her husband died, funeral and other expenses forced
her to borrow widely. The Credit Union became one amongst a number of creditors, but
subsequently agreed to clear a moneylending debt. As a result, Dolores feels that she can
no longer take the Credit Union into her confidence.

I can't tell them about it because they gave me the money there last year to pay off the
moneylender - and now I'm in debt with a moneylender again.

In fact, Dolores named the Credit Union as the most pressing of her creditors - joining
the ranks of those making doorstep calls. This point of contact is a real problem for
Credit Union initiatives. In a report that stresses the importance of credit unions - there
are 645,000 members in Ireland alone - Hinton and Berthoud1 recognise this difficulty.

Visits to members' homes were not easy to arrange. It was an embarrassing task requiring
great tact. Not every volunteer was prepared to be a debt collector.

Dolores' reluctance now prevents her taking advantage of the new Credit Union scheme.
Her reticence is rooted in an acknowledgement of the Credit Union as different. Here the
community acknowledges - however ambiguously - the Credit Union's extra rigour in
controlling distribution of funds. Those borrowing from moneylenders hold in high
regard the Credit Union’s interest in the reason for loans and its anxiety to confirm the
client’s ability to pay. Yet it is exactly that which leads the same people to return to
moneylenders. In a sense it is an in principle acknowledgement of the benefits of the
Credit Union rather than a practical solution to borrowing needs. This can be seen in

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practice. When Katrina went to the Credit Union for help within the ESB she was
turned down.

With moneylenders you apply one week and you get it the next. They don't care if you want to
go to the pub and blow it. You just get it ... not like the Credit Union - up before a panel. If you
go to the Credit Union they want to know what you want the money for and I think that is quite
good.

Katrina articulates "the way things are." and "the way they might be". In practice she is
locked into a world where social forces reduce the effectiveness of the Credit Union. She
admires the Credit Union's position but in practice regards it as impractical. The Credit
Union's extra rigour also affected Sean. He felt that the organisation wouldn't believe in
the existence of his complex system of loans in different names. Awareness of the
likelihood of refusal constituted his main difficulty.

I'd love to go to the Credit Union but they won't entertain me. It's the embarrassment. If I go
up there and they say no it's a waste of time, I can't accept disappointment. To be refused
would traumatic - a deep depression for me, with Christmas spoilt for the children because
they haven't got what they wanted. I wouldn't want to be all depressed knowing that I couldn't
get it.

Respected, but circumvented, the Credit Union struggles to retain its principles within
the web of community debt. So how successful is the Special Account Scheme in
engaging the interest and cooperation of indebted people? Several families in the study
group had become the first clients of the new scheme - and amongst those too were
previous members of the Credit Union. Struggling with the expense of three births in
quick succession and a move to a new home, Christine and William had integrated the
Credit Union into a pattern of other debts.

When I started with the Credit Union I was just saving and taking it back out. I would manage to save for
a while, then borrow and pay everyone I owed. But it came to Christmas and we had no money so I
ended up borrowing and we had no intention of that. I went over (budget) for Communion and
Confirmation and when the day came for Paula's, we hadn't enough money for her. Back over to borrow!
But the Credit Union was in arrears so we didn't apply for the loan - she said we wouldn't get it.

Despite an elaborate arrangement of debt within which both husband and wife had
Credit Union accounts, Christine and William have now become part of the special
accounts scheme. So their major debt repayments to the ESB and moneylenders are now
administered by the Credit Union.

We pay £5 into a new Credit Union account and they pay out from whatever money I put in.
One moneylender didn't like it very much. Another said not to worry about it - I dreaded
seeing him the following week, but he hasn't been back. So presumably he's got the letter
now.

For this couple the Credit Union's primary function was solely to act as a credit source.
But when Christine recognised that her private debt-management system was in crisis, it
was to the Credit Union that she turned for advice. Although they still have to repay their
Credit Union accounts at £20 each their participation in the new scheme reduces other
repayments to £3 for ESB and £1 to each moneylender. By slowing the system down,
the special accounts scheme offers a breathing space for Christine and William to
recover. Such participation in the new scheme can be a liberating experience for
indebted people. Initially sceptical, Theresa is now convinced.

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Budget Sheet “E”: Getting out of Debt

Theresa: Give me another month with no threats coming through the door, no warnings from the
ESB and I’ll relax. No fear of disconnection! I feel better and I'm not receiving charity. You can
keep your dignity and your pride is still there. You don't need to be ashamed of anything.

An unexpected late pregnancy forced Theresa to top-up her moneylending account to pay for a
pram and other necessities. Holding back the rent for a year resulted in a court summons and an
order to repay arrears at £20.00 a week.
__________________________________________________________________ INCOME
Unemployment benefit 142.00
Children's allowance 16.00
TOTAL INCOME 158.00

OUTGOINGS Arrears
Rent 15.00 388.00
Court order - rent 20.00 -
Electricity 10.00 30.00
Food 97.00 -
Solid Fuel 27.00 -
Newspapers 6.00 -
Moneylender 6.00 -
TOTAL OUTGOINGS 180.00 Total arrears: 418.00

New Outgoings:
Rent 15.00
Food 97.00
Solid fuel 27.00
Newspapers 5.00

Credit Union:
Rent arrears (5.00)
ESB (6.00)
Moneylender (1.00)
Sub Total CU 12.00
NEW TOTAL OUTGOINGS 156.00

Participating in the new special accounts scheme relieves Theresa of the responsibility of
distributing payments. A £12.00 payment to the Credit Union effectively reduces her total
outgoings by £24.00 leaving her with a more manageable budget

A friend told me about it. I said "They promise you this and that but they never seem to work."
She told me to get in touch. I did and it sounded great, not charity which I hate. We haven't
much but we have our pride. It's about budgeting, cutting back so that everyone gets a bit
less. It goes to the Credit Union and then they pay those people. There's no moneylenders
knocking at the door. No chance of the electricity getting disconnected or being evicted from
your home for arrears. All these little things were guaranteed. Normally I hand out £70 but I
gave £12 to the Credit Union for all these little bills.

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Because the responsibility of payment is still there, Theresa's sense of pride is intact.
Also with the support of a friend, Deirdre and Patrick contacted partnership's
indebtedness programme.

When we got into the debtor's programme I left the Community Centre feeling great. I know
we have arrears on top of us and a docket man too. I know I have to pay back what I owe, but
now I'm only paying my coal and my rent so as far as I am concerned I don't owe no-one
nothing! That's how I feel! I do have to pay money to the Credit Union, but I was giving the
rent man £11 (£2 arrears), my docket-man was £20 and my light was £10. Now that's all cut
to £10. I felt great after it. It'll be a long slow business - cutting our money an awful lot, but I'll
get out of this problem and I'll never go back to it.

Like Theresa, Deirdre and Patrick have been relieved of the pressure to keep up
payments that they couldn't afford. But what linked these experiences was a sense of
excitement. Both Theresa and Deirdre visibly shone with optimism and displayed a
feeling of empowerment whereas Christine expressed some worries about her
moneylenders. So how does this system affect the moneylender and others who continue
to expect their old payments? What reactions did participants experience? Deirdre
received a fairly lukewarm attitude when she informed her moneylender about her
participation in the programme.

There's no pull in him at all! I said to him "did you hear anything about this?" and he was very
rude. "You're not the only one on this fucking thing." He's only getting £12 a month instead of
£80 so I can see his point of view - but I don't care. That's his business. They told me it
doesn't matter whether it's only 50p a week I'm paying back as long as I'm paying something.
If I have any bother I have to get in touch with them (money advice) again.

On the other hand, Theresa experienced a completely different reaction from her
moneylender.

Usually there would be a week when I'd have to keep the door closed and hide from him. I
wouldn't answer and tell him I didn't have the money because I'd get embarrassed about it.
He came a couple of weeks ago and I explained to him that I was in this programme and he
was nice. So this week the door was open and he said "hello" and he's gone by. He didn't get
a bit narky.

In general, licensed moneylenders are more inclined to co-operate with this scheme. One
firm in particular is anxious to maintain an enlightened profile. One participant reports
the collector as having been "delighted to see that I was sorting myself out." As we have
pointed out elsewhere, the practice of consistently calling unsuccessfully to families
bites into the economic viability of a regional or national company. Conversely,
harassment seems to be effective only on a neighbourhood or city basis. The study
suggests that unlicensed moneylenders don't have the confidence to challenge a united
front, and are for the moment content to grumble1.

Clearly first contacts with the scheme have proved successful. Often it was the first
chance they had to discuss budgets thoroughly - finding this easier with a third party than
attempting this independently. But there were those who through suspicion of the Credit
Union denied themselves this opportunity. This occurred where those who were living
with debt were wary of the implications of the Credit Union's local proximity, as with
Sean.

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 These kind of people - they're too heavy. When they want the money they're on your
doorstep. I started the Credit Union because I want to sort myself out but I couldn't afford to
put any money away. I know if I borrowed £1000 from the Credit Union I would only be paying
£1056. But you have to be a regular saver with them for 13 weeks.
would only be paying £1056. But you have to be a regular saver with them for 13 weeks.

Sean's interview was studded with constant references to the Credit Union. But the close
proximity of the agency presented a massive problem within a debt management system
that excluded doorstep calls. Possibilities for creative debt-management through phasing
payments and extending loan periods were reduced by Sean’s proximity to the lender
and his view of the lender as “socially worthy”. It was the "social-voluntary' image
which made Liam sceptical.

With Credit Unions most people are doing it voluntary. The man behind the desk could be your
neighbour ... I know most of them. It's degrading to go down. The people that do it voluntary on my
estate should do it at another part of town. Anyway you have to save for over 6 months before you can
get a loan. You can't blame them! How many times have they been caught?

This bleak formulation encapsulates almost the whole spectrum of difficulty. Pride,
shame and isolation combine with the feeling of entrapment to reduce opportunity of
solutions at a local level. An unlicensed moneylender may be local - but he doesn't
represent ordinary people. He is "other" - in the estate but not of it, he nevertheless
weaves the fabric that knits the indebted community together, creating a sense of
complicity between himself and his network of clients. The volunteers at the Credit
Union office represent the respectable face of the community. They set their face against
indebtedness and are involved in a programmatic response to it. The indebted
community understands instinctively that membership of the new scheme is no
guarantee against further emergencies. The desire - the compulsion - to keep the
moneylender 'on hold' results in a rejection of the Credit Union - a situation that worries
Berthoud and Hinton in their Money Advice Services report1. They observe that
admission to special accounts schemes provide immediate relief for the client, but
express doubts about long-term effects and recurrence of debt problems.

The saving period that determines eligibility for a Credit Union loan prevents some
people from taking advantage of the comparatively low interest rates and the new
indebtedness scheme - although the study is forced to observe that this did not prevent
others from integrating CU loans into their pattern of existing debt. However there
would seem to be some justification for abandoning this formality for smaller loans
otherwise the province of the moneylender.

4.7 Conclusions

This chapter has noted the way in which both state sponsored and community-based
courses plays a part in breaking down the isolating effect of indebtedness. They offer
both a social environment where problems can be tackled and an information point
through which those who are indebted may access advice and support services. In the
most extreme example it can be seen that non-custodial sentencing such as community
service orders also fulfils this function. A money advice service can specifically target
such schemes for identification and referral of cases. Courses and schemes also represent
money-advice intervention points for education and awareness raising. Where

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identification of indebtedness results in early referrals, community-based schemes may
go on perform the vital function of continuing support for recipients of debt advice. The
study therefore recommends that the money advice service encourages and supports all
such schemes in raising awareness of money-advice.

The courts however perform an ambiguous function. The study attempts to see courts as
a (final) opportunity to identify problems of indebtedness, but notes that pressure of time
results in its social role being relegated to administration. The study recommends
stronger liaison between money-advice and courts and suggests that new procedures
accommodate realistic repayments and lower visibility of indebted people through less
formality, paper proceedings, and in camera private sessions.

This chapter makes some attempt to grapple with the capacity of those who are trapped
within indebtedness to be reflective about their position; to engage with the particular
events that help indebted people to both admit there is a problem and to seek advice. We
asked two questions. How does this occur? How can it be utilised? Motivation is one of
the most difficult areas to determine. What gets someone outside the house and into a
course or an organisation? What process draws people into an advice centre? Why one
person and not another in similar circumstances? It is suggested that the debt-advice
service is in a position to transform these imponderables into both knowledge and action.
Here, case history becomes extremely important as crystalised knowledge. The study
suggests that the knowledge of success strategies could be placed in the public domain;
transmitted as part of education, awareness raising, and directly in client-centred money
advice.

The study notes that debt counsellors who carry out fieldwork with prospective
participants are not seen as representatives of the Credit Union. They are recognised as
part of a community strategy and as such have some distance from other organisations.
In particular participants appreciated the scheme's independence from either the Local
authority or ESB, and were relieved that the weight of dealing with these organisations
had been lifted. In addition debt-counsellors do not orientate to any one estate. Their
accessibility through existing community resources makes them more approachable.

It is important to note that new participants had approached the scheme through word of
mouth - not unlike the introduction of a moneylender by a friend! Money advice and
debt counselling thus takes advantage of existing neighbourhood mechanisms. This
added impetus operates through existing connections with neighbourhood community
resources, and in turn connects to central resource systems. By taking the service out to
localities debt-counselling and money advice improve and encourage access. This
reduces the stress that might otherwise result from a "special trip" to the centre for an
interview.

Clearly the new scheme has brought benefits to those who have participated. But its
scope is limited by existing ideas about how the Credit Union works. Sections of the
community will not approach the Credit Union, because of neighbourhood stigma,
previous Credit Union borrowing or a commitment to a particular debt-management
strategy that they are too cautious to break. Thus although debt-advice gradually eats
into existing idea systems within the community, negative ideas retard this process. How
can this be changed? Some change will take place with the success of the new scheme,
although this is likely to be slow. It is estimated that a typical client needs a day and a

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half of attention1 from a money advice service, and therefore it is difficult to envisage a
service that would have enough advisers to cope. Non-specialist workers backed by a
specialist support system may therefore prove both appropriate and effective. The
following section will deal with the generality of community response, but in particular
it may be possible to intensify the current scheme through the use of voluntary lay
workers.

In particular, those people who were subject to the debt process and who are now
beginning to overcome their problems could assist in further debt counselling. Several
participants expressed interest in carrying out some kind of debt-related activity;
particularly those who had begun to make community connections. This functions in
"turbo-charging" the existing system and increases the democratic and participative
dimension of the programme. Others who put forward their own ideas about debt-related
services - different styles of payment collections for example - were beginning to think
as community activists. Their orientation had moved away from isolated individualist
notions towards notions of social action.

This report therefore recommends an expansion of the current system but suggests that
the idea of lay workers be evaluated. Such work needs co-ordination and training
resources, yet the study established that a strong tradition of voluntary work already exist
within the community. If this was mobilised, the negative ideas that constrict the special
accounts scheme may diminish.

It is also recommended that the local character of the scheme be retained in a way that
ensures privacy. Debt counsellors have managed to develop a highly effective blend of
informality and seriousness, which works best at local level. This is more demanding in
resources than an appointment-based central system, but is more appropriate for
Loantown communities. The feelings of participants in the study about the particular
(geographic) location of money advice will be examined in the next section.

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CHAPTER 5. Community, conflict and the debt process

5.1 Overview

This section deals with the social aspects of the debt process. It specifically addresses the
effects of debt on communities and neighbourhoods in an attempt to redress the damage.
Here we have to distinguish between community, neighbourhood and locality. Merely
because people live in the same locality neither signifies a community of common
experience nor of shared interests. Yet Loantown estates - the localities - are typified by
low income, by a variety of social problems, by a dependency on local and central state
benefit. They suffer the same problems of environment, housing decay and transport
difficulties. In theory the population has a common interest. In practice the problems
have produced internal conflicts that restrict the possibilities for change.

The most serious conflict lies at neighbourhood level. Where a sense of shame and pride
prevents those affected by debt from openly acknowledging or sharing their problems,
neighbour becomes isolated from neighbour. The study has referred to a subculture of
indebtedness. This is not used in a pejorative sense. The indebted know that to be
indebted is socially unacceptable and incurs clear negative sanctions such as electric cut-
offs, evictions, the danger of unlicensed moneylenders, stigma, social isolation.

Furthermore its lifestyle lends itself to deviant money management where contracts are
routinely re-worked. But despite the presence of a common language, a social
explanation (a "blame structure") and a neighbourhood network of debt acquisition, the
subculture does not cohere socially. Social fragmentation and mutual distrust form part
of the subculture's defining characteristics.

The following section addresses the ambiguities in the system. Here the study looks
seriously at the social viewpoints of indebted people. Where do they socially locate
themselves within the structure of the neighbourhood? By determining the taken for
granted notions of those who have become indebted the study seeks to identify some
components of community conflict. By so doing it may be possible to pose the question
of a community strategy and an accompanying possibility of change.

It is this framework that seriously impinges upon the success of a money-advice service,
and helps shape its chances of success. So the relationship to money-advice is tackled
later in this chapter.

5.2 Community suspicion: fear and loathing in Loantown

People talk about me

Talk about me night and day
But I say Lord forgive them
And I walk the other way
Tina Turner I smell trouble

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We know that poverty precedes debt. We see the initial cracks of low income and
poverty. But the social destruction that accompanies the debt process is deeply insidious.
We watch the population gradually fragment as a series of fissures weaken the structure
of communities. We hear the ominous sound of creaking. The pessimistic will speculate
on its end. Just how long will the creaking go on? How much time before the gaps widen
sufficiently for the whole edifice to tumble?

At the core of this fragmentation lies a deep-seated distrust and suspicion about the way
things work and indeed in the world of career debt there is much to be suspicious about.
The tension that suffuses a life of "just coping" alerts the indebted person to a need for
vigilance in his or her dealings with the world outside. The study drew attention to the
perceptions concerning help agencies and in doing so detected an underlying bitterness
concerning others who sought assistance. Near neighbours were often characterised as
devious manipulators who cynically projected outward and visible signs of poverty in
order to maximise benefit and charity payments. Participants in the study stressed their
refusal to accommodate the lifestyle ("living in the dirt") that success necessarily
entailed. In particular, married couples showed considerable antipathy towards lone
parents and those who weren't married. In this adaptation of a popular stereotype,
individuals took advantage of the system only to leave their children "home alone".
Here, single mothers in particular were typed as hedonistic, within a lifestyle where
sexuality took precedence over child welfare.

They don't clean themselves, they're dirty, they're filthy. I wouldn't pimp on them. I won't give
you their names but I'm telling you straight - they're getting away with it. They know that their
boy friends are living with them and they're going to the Clinic. Their boyfriends are there and
they're getting it. They're even getting DDT down there for their houses! ... And the kids are
used at the clinic - their noses are running and they're dirty. The boyfriends don't give a shit.

This characterisation went beyond an explanation of the indebted family's failure to

mobilise emergency payments, such that it represented an attack upon a whole section of
the community. Here, benefits represent scarce resources for which there is competition
and so the benefits system becomes a source of conflict that divides social groups.

You see all the (same) faces down there at the Clinic - if there were 9 days in the week they'd
be down there on all of them. If you can fiddle the system they can do it. They just take and
the more they know (about benefits), the more they take. And they don't owe anybody
anything.

The allegation of obtaining payments under false pretences illustrates a deep schism in
the community. Here Christine and William are coping with unemployment, disability
and the pressure of four children close in age. For this couple the locus of blame lies
with society. William was denied employment opportunities, although despite a
handicap he is able-bodied. A series of unsuccessful attempts to obtain emergency
payments combined with patronising treatment by a voluntary organisation soured their
view of others in the community. Interestingly, those depicted as misappropriating
available finances were characterised as not being in debt. The fact that "They don't owe
anybody anything" rendered them less deserving, a neat reversal of accepted social
mores.

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This division in the community is more than a partition erected by those who consider
themselves respectable, honest and deserving. It is marked by an ingrained belief that
others - in particular the next door neighbours - are sitting in moral judgment. Here the
focus of this feeling is concentrated at the doorstep. The doorstep represents more than
the entrance to the house. In the everyday world of indebtedness it marks the threshold
between the safe interior of the home and the antagonistic world outside.

The neighbours? I'll say they know he's a moneylender. I wouldn't keep him at the door, but
they must know. I've never told my neighbours, only my friends ... I remember the gossip
when my marriage broke up ... People don't help each other here at all. There was a woman
up there evicted with 7 kids - they didn't stick by her, and her husband is dead now.

Sheila's problems with moneylenders led her to a suicide attempt. Now she feels that life
holds out little hope. Commenting on the embers of the fire in her front room she said
wryly "I'm afraid the fire's dead. Like myself." Her outlook is structured by a bleak
assessment based on experience. She therefore assumes that neighbours know about her
debt problems because from her point of view that is the way things are. This feeling can
prove extremely debilitating as Linda's comments illustrate.

Oh God! You feel everyone is talking about you. You're frightened to look over your shoulder.
"Oh, she has this fella (moneylender) going into her, and that fella." The people in the street
know when he's coming and not being paid. They're watching everything. They must see
your man knocking at my door and getting nothing. Week in and week out. It's so
embarrassing. And if there's no one there he's calling two days a week. It's terrible, because
they're looking at you. Then he's no sooner gone than you come to the door. So they say
"She never answered him today".

This feeling of surveillance contributes to Linda's anxiety. Her current problems have
encouraged her to continue the tranquillisers prescribed to her during a period of
domestic violence. The situation has resulted in the disturbed behaviour of her son and
she describes herself as "fearful". Rita feels the much the same way as Linda. The
family's multi-debts have created considerable tension in the house and her son has
become a school refuser, pretending to go to school, but instead returning home to hide
under the bed.

Since I've come into this situation I've got very bitter. People point you out! Everyone talks
about one another here. Everyone wants to know your business.

Her suspicion of neighbours prevents her joining community groups and because of this
feeling of being watched she is unwilling to approach an agency to seek help. Yet just
who is watching whom? Here, community surveillance can operate as a two-way
process. Lisa is drawn to self-comparison, and then extends her point to consumption
patterns.

I know I'm not as bad as some people but there are some people and I've seen it. They're
getting everything under the sun and they just go out and drink it. They just spend the whole
lot. I wouldn't beg for no-one.

This point is re-iterated continuously and emphasises the disavowal of indebted families.
Drinking constitutes illegitimate spending and is not properly the province of indebted
people. Indebted consumption patterns are predicated upon disavowal - in this case a
denial of the social. Much of the criticism of this behaviour is couched in terms of its

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effect on children of the families concerned. The valorisation of the family legitimates
the withdrawal to the home - that is any case a consequence of indebtedness. In this case
community suspicion has the appearance of a clash of value systems. Certainly it
contributes to the isolation of the indebted family as it becomes increasingly hostile to
sections of the outside world. In particular stereotyping is a common feature of isolated
and marginalised groups. Living in a peripheral estate, marginalised by debt and
atomised as a group, indebted people fail to make common cause with others equally
oppressed.

5.3 Keeping quiet: the sound of silence

Within this arena, the debt process adds to the barriers by creating a wall of silence.
Pride, shame, guilt and the fear of stigma combine to persuade the indebted person to
keep quiet or put up a front. This is a face for popular consumption. Part of this outward
face depends on appearance. It was Linda's concern with appearance that led her to
secure a large Credit Union loan for double glazing.

When I got the money I went straight away and got weather glazing for my house - you see I
love my home. Don't get me wrong. I like a nice home. I went to ask for a food pack from the
Holy Fathers but they think you don't deserve it ... I was always presentable and the house
was always clean. Every so often I'd leave the debts back and go in and get clothes for me
and (my daughter). We wear the same things now. All these things I wash and clean them
all. I have things for years ... I never let a person know that I had nothing.

Keeping up appearances is part of the debt process. At a time when the indebted person
is coming under increasing financial pressure the necessity of maintaining self-esteem
becomes really important. But it’s also a way of concealing problems from the outside
world. In reality the figure on the doorstep stands with her back to the outside world.

I never had a holiday. People would ask when I was going and I'd roar at them "Next year!" - but it wasn't
their fault. You could never be the same level as them. You're way down. I used to have loads of friends
but now I don't have a social life. They do, and they're wondering why I can't go out. I can't explain what I
owe - so I don't tell them. They say, "Have a nice time!" and I can't have a nice time. I can't afford it. I'd
walk to town without the price of a bus ... I was shutting everything away - everyone was thinking I was
well off ... I gave people the impression I was never short.

Adopting the role of 'normality' allows Linda to cope with everyday life. As she says, "It
wasn't their fault". She has built an identity round appearance and thus their perceptions
are conditioned through her construction of reality. At the level of everyday interaction
this clearly has benefits for Linda but her friends and acquaintances are in turn
constructing a view of the social world that is only partial. Thus the comprehension of
generalised debt is diminished, leaving room for development of common-sense notions
of indebted people as being a certain type of person - feckless, incapable, dependent, a
scrounger.

What implications does this have for social intervention? If Linda wishes to maintain her
self-esteem why not leave it at that? But inside the home Linda's identity crumbles.
Distressed and afraid, she cringes from the visits of the moneylenders and is haunted by
the prospect of a chance meeting with the Credit Union worker who can challenge her
'street' identity. Linda said that speaking about her problems in the interview made her
feel better. In common with debt counselling it offers catharsis - a purging or cleansing.

87
Now that she has social links through her FAS course she is gradually finding it easier to
talk to people.

Gradually widening the circle of friends has also increased the individual's awareness of
the extent of debt in the community. Many indebted people acknowledge the extent of
debt in their communities in principle. But it's a rational judgement rather than one based
on 'lived' experience ("others must be in the same position"). By extending social links -
by meeting with others in the same position - increasing awareness can help reduce the
constant and destructive self-blame of many indebted-people. Most importantly for
social intervention, we are trying to challenge misconceptions about the nature and
extent of debt. The study has drawn attention to the kind of stereotyping that arises even
within welfare agencies. If more people can be encouraged to speak about their debt
problems this will allow agencies to confront these basic stereotypes. At neighbourhood
level, community organisations have to explore ways of "revealing" the nature of debt,
so that relationships within the community can be solidified and antagonisms reduced.

5.4 Social blame and acknowledged debt

Indebted families were most likely to blame themselves where close family members
were seen to be coping on the same level of income. This tended to undercut social
explanations for debt. And this inward turn of guilt tended to limit the indebted family's
ability to generalise from their own position and seek assistance. They characterised
themselves as unable to cope, as letting things slip. On the other hand, acknowledgement
of common problems came for those who had begun to explore solutions - particularly
where there was contact with a voluntary or social group. In this way Linda began to
become more aware through a support group for relatives of those with drink problems.

I was getting more forward and getting to know myself then. It gave me courage and
confidence. That's where I learned, and for the first time in my life I was doing something
without being frightened. There was always someone there to help me. You can share things
... but you find everyone has debt problems. It's very emotional - very touching - to sit around
the table and talk about houses, mortgages. Because middle-class people are coming down
with debt as well.

Linda still blames herself for debt - but only in terms of an overall failure to adequately
respond to her own emergency. Her membership of an organisation and interaction in an
awareness-raising format allowed her to give context to her problems, and to appreciate
the extent of debt.

I blame myself, I blame myself. These moneylenders caught me at a bad stage. They came
with something one colour and they turn round and say "take another!" ... but I met some
great active people that sign on at the Labour. There's lots who go who want work but there's
no hope. I'm happy to be working here but how many are out there?

Margaret had become so depressed that she took a drug overdose. But her search for
work brought her into contact with a wide range of people with similar problems. In this
way she came to acknowledge that she was not solely to blame for her indebtedness.
Sheila however blames herself because she thinks there's nobody else to blame. She
feels that taking on a succession of debts from the moneylender was bad money-
management but recognises that others act in the same way.

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 People must be in the same position as ourselves anyway. I know the main thing to do is to
talk to someone about it - not hide it inside. But we're ashamed to go out.

Although she is able to generalise from her own position and wants to deal with the
problems by sharing them with others, the shame associated with indebtedness prevents
her going to organisations for help. As we have seen, indebted people who had made
attempts to become involved in social activities began to explore ways of getting out of
debt. But where they became too isolated, they began to shift blame towards either the
government - in terms of low benefits - or of the agencies who distribute cash and other
payments. As Frances says of her benefit;

Why don't they give us money for clothes? I find it hard to replace all that money in the week.
If God would give me that money! All you’re supposed to do with that money is shit and eat.
Sometimes you wouldn't have the price of toilet paper to wipe your behind after eating out of
that money.

Where a significant section of the population exist on benefit, the opportunities for any
income variation is marginal - only work in the informal labour market, crime,
borrowing or charity remains. But the major option of borrowing is accompanied by a
gradual and continuing slipping behind in payments. This produces a de facto
dependence on charity or social welfare benefit payments. It's the indebted persons' only
flexibility; their room for manoeuvre. Building up arrears or a moneylending debt with
the intention or expectation of obtaining a benefit payment to clear it is - in certain
respects - a realistic strategy. But it's not certain. From the point of view of the indebted
person it's a lottery with a broad chance of success. For those who have failed to be
successful the frustration and capacity for blaming others increases accordingly.

It's hardly surprising then that any broaching of this topic produces an intense response.
Throughout interviews, participants would continually return to the question of
distribution of welfare payments. The argument spills over into administration of local
authority and electricity arrears, those who receive favourable agreements, maintain
large sums in rent arrears or who have debts written off. The administration of payments
produces conflict that is not limited to the dramas enacted in agency offices and waiting
rooms. The idea of unfairness grips the indebted community by the throat. The repetition
of this idea during interviews suggests an increasing anxiety on the part of participants.
The outcome is a continuing disaffection within the community.

5.5 Towards a money advice service: The community solution

We've seen that those who can continue a social existence during indebtedness have
more chance of avoiding this social polarisation. But what community response can
adequately tackle the problem? Clearly agencies that distribute payments already operate
a criteria-based system, and we have drawn attention to the need for religious and other
charities to maintain flexibility. Nevertheless there is a need for increased sensitivity in
day-to-day practice that the community as a whole can recognise as fair.

The polarisation in the community, the atmosphere of surveillance can be tackled

through a community development programme that attempts to involve all sections of
the community. This does not necessarily mean building new centres, but it does
demand the building of links between groups. Some suggestions are made later in this

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section that deal specifically with some of the problems encountered by indebted people.
They are not exclusive to people in debt however, but problems shared by those on low
incomes. More specifically, indebted people need an organisation at local level that they
can call their own. In this case it should offer support on an everyday basis.

We need an organisation that can just be there - lend an ear. I can say to people "I was there
where you are.”

Within this chapter we tackle the provision of an advice service within a community
context. Interviews with those who have experienced the initial work of the money
advice service allow the study to make some preliminary observations. The views of
those who have hitherto felt unable to seek advice offer some guidelines on future
provision. The preliminary focus is on operation within the current framework of
services. The views of participants oblige the study to assess differing modes of practice
in terms of location and style. Finally an examination of the possibilities offered within
the community extends to innovations - in terms of method and participation.

This study has consistently referred to "indebted people". It is a term that attempts to
categorise objectively a section of the population and to separate it specifically from those
who are financially able to take advantage of consumer credit. The study has also referred to
subculture in an attempt to show how the "community of indebted people" coheres - to
demonstrate the connections, and to link the lifestyle and outlook of indebted people.
Subculture is used here to give a concrete-ness to a group that otherwise appears diffuse. But
it is a group whose world-view is constructed through its marginalised position, through its
indebtedness. The feeling of exclusion that accompanies marginalisation contributes to the
social explanation evoked by the excluded. It creates both a common terminology and
particular consumption patterns. As we have seen, those who are indebted offer a critique of
those who breach these expected patterns.

The ability to manage finances creatively over long periods is - however problematic -one of
the strengths of the group. Its weakness arises from the relative isolation of its members,
accentuated by the valorisation of the home. The disavowal of the social limits the ability of
the members of the subculture to articulate a common position and may explain why it has
failed to generate formal or even informal groups within its ranks. Conversationally,
"indebted" is recognised as a term that describes their position. But it is universally disliked -
representative of the stigma incurred by people in debt as they struggle to stretch available
finances. This has a clear impact on advice services within the community, since the name of
the service will partly affect accessibility.

Katrina's example demonstrates the way in which she overcame debt without the assistance
of a special scheme. But she feels even at this stage that a service could be useful to her.

I think an indebtedness counsellor would still be a lot of help to me even at this stage - I'm half
way out of it. If people could say to an advice centre "I'm after getting into debt and I don't
want any more - can someone advise me?" That's why I have great respect for Alcoholics
Anonymous. To admit something to yourself is one thing but to say it in front of a group - I'm
just lost in admiration. "I am up to here with debt and I can't cope." That's a big thing, because
no-one knew I was sitting here crying my eyes out. But "indebtedness" is an awful term.
Financial advice centre would be better.

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Katrina feels that an advice centre still has much to offer, but her voluntary experience in the
community sector has equipped her to handle a visit to a town centre service. Her idea for a
self-help group represents a possible starting-point for building a grass-roots community
organisation, which could provide mutual support for indebted people in the community.
Ambiguity remains however. To admit indebtedness in front of a support group is one thing,
whereas walking in the door of the "indebtedness-centre" risks stigmatisation by observers.
Almost all participants in the study acknowledged this reality. In particular, Linda, who is
still recovering from the trauma of domestic violence and several years of debt, was
concerned about privacy. Her continuing depression and fearfulness leads her to be more
concerned about the design of an advice centre's interior.

I'm loading all this onto you now and it does me good. Thank God someone knows my
problems and it's not a big secret! You get scared, keeping things to yourself and worrying.
It's great to talk on a one-to-one basis, knowing it's not going to be discussed with anyone. I
couldn't go and talk to anyone about this now, or let people know I'm in all this big debt. I
wouldn't talk in case anyone would hear me. If we were in an office I'd like to make sure that
no one would hear. The Clinic has a door but people can hear every word. A soundproof
room sounds so secure. It's OK to be seen going in if it's private when you're in there. And
Money Advice would be better than calling it Debt.

Sheila proposes a community-based solution, using a combination of pre-existing facilities

and regular estate visits. Here a resource centre has already proved useful for a variety of
tasks and provides a place where information can be obtained.

With an advice centre everybody in the 'hood knows where your going ... it's very public.
They've got used to our resource centre and there's no stigma about going in there. We have
welfare rights and now the Local authority brings the rent man every week. People are quite
comfortable with that. They're not willing to go into town and look for information. It should be
available - not on the doorstep - but if they came once a month. You would say to yourself
"They'll be around in 2 weeks - we'll go down and find out." We're kind of far away from
everything and people are out of reach.

Where centres are sufficiently integrated into the life of the locality, they offer a means of
starting with what people already know. This helps to overcome the fear of going to a new
centre that prevents some participants from seeking help. In addition, the unwillingness of
people to go into town for advice is based both on expense and inconvenience. With several
children to look after, a trip to an advice centre can be quite complicated to arrange. With
four young children - two of them under school age - Lisa comments, "I'd love a centre but
sure, who's going to go into Loantown?” The flexibility of a peripatetic service would offer
greater accessibility.

The question of independence for a money advice centre - clearly distinguished from other
agencies - met with a mixed response. Sean for example would have nothing to do with a
centre because he feels that the involvement of welfare authorities compromises his
confidentiality.

Go to an advice centre? Personally? Me? No! My life style isn't great but to me it's good
because I have a roof over my head. People would love advice on this, that and the other. But
where do they go? The welfare are setting up something for debt and that's fine. But people
won't go to them. If the welfare find out that they're living beyond their means they're going to
cut their payments. I think they'd cut me in the morning.

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Aggressively independent, Sean views the aim of social welfare as cutting costs rather than
assisting people. He is suspicious about advice centres, although he considers that for others
in the community they might prove helpful. For different reasons Margaret disagreed with a
dedicated centre. Her success in making arrears arrangements convince her that the role of
those concerned with debt problems should be advisory. An advisory service would operate
within the existing system, negating the need for independent advice. Margaret kept up job-
hunting despite health problems, so asking for help no longer presents the problem that it
once did.

I don't know whether I agree that it should be independent. I got a better response when I
went (to the ESB) directly. People like partnership now, could give them advice on how to
help people like myself ... but I've learnt one thing and that's asking gets you there. Before I
wouldn't but now I would. Not sit and worry - go and ask.

Yet where advice is tied to particular creditors, a desire for first call on available finances
tends to weight arrangements in their own favour. This may explain the experience of a
participant with electricity arrears, who was discouraged from bringing her friend as support.
Here the deal was offered as "exclusive" - "don't tell your friend!” But for most participants
in the study, the prospect of dealing with the Local authority or the ESB was extremely
daunting. Moira was asked to ring the local authority for advice but confessed to being
"terrified". Luckily a community activist noticed her distress, took her to the phone and made
sure she had support. Thus there was general agreement that the role of independent advice
should extend to liaison. But for some like Liam, the idea of advocacy was the most
attractive. His experience in trying to get financial help left him angry at the system. For
Liam, the main task for an advisory service would be to aim for success in the area in which
he feels he has failed.

Why doesn't the partnership go to these people (ESB, local authority) to get help with the
bills? I guarantee partnership would know who to go to. When you go to see them people
yourself they might pick you up different. It has to be someone who (knows the system).
When you got to the centre you want someone to represent you. Take the strain off. It's no
use me going - I don't know what to say. The Clinic are allowed so much per house. They
should be able to work so the people that need it, get it.

In Liam's view, an advice centre would be run by an independent organisation skilled in

welfare negotiations. Professional workers would not only negotiate on his behalf but would
act to ensure fairness in the distribution of payments. A feeling that one had to be equipped
with "correct language" was a common theme in the study - so advocacy was rated highly.
Ann, for example, said her shame prevented her asking for advice and would only consider
going for help if a friend accompanied her.

I'd prefer if someone did things like approach the Electricity Board and come with me to the
court. If I'm going to court the counsellors give me letters to show the court to tell them the
situation ... the condition of the house and everything ... If someone could come with me like
Martin at the Community Centre ...

Pride rather than shame prevented Dolores from seeking help, but support offered her a
similar solution to "getting through the door" of an advice centre.

I never asked for any help. I want to but I don't like. It's pride. I would have to have someone
to go along with me. A friend. ... I wouldn't go on my own for advice. And they'd need some
place for the children.

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Where people are isolated and under stress, they feel more comfortable with a friend to lend
moral support. Pride renders feel ill at ease in asking for assistance, so anything that smooths
their path is beneficial. Several people named well-known community activists as the people
they would most like to accompany them. Here, the community sector was able to bridge the
gap between central-authority figures (Local authority and the ESB) and the possible
intrusion of neighbours. Again the existence of local resource centres helped to provide
community workers with a local base and accompanying visibility.

I think the house over there - the resource centre - helped me as well because I got to know a
lot of people over there. The right people if you understand me.

The money advice service has the advantage of working from a broad community base and
participants in the study constantly envisaged an extension in its scope. Whilst it may be
possible to provide all the layers of the broad service that people would like, the scale of the
problem demands heavy resources. Here the money advice service can use its community
base in drawing support from committed activists.

5.6 Conclusions

In this chapter the study poses the question of social relationships within the community. It
begins by noting the damaging effects of indebtedness within neighbourhoods and localities
- the paranoia, stereotyping and distrust that eats away at the social fabric. The study suggests
that this strongly influences the chances for success of money advice services.

Participants in the study specify the following requirements from a money advice service:

(1) Privacy
(2) Not to be identified as "indebted"
(3) Advocacy services
(4) Negotiating services
(5) Counselling services

In addition there were requests for such a service to attempt to ensure fairness from existing
agencies. The issue of independence caused some confusion for many participants. Where
people are locked into career debt, their dependency on welfare payments blurs the difference
between agencies. This caused partnership to be categorised by several participants as
another payment agency, rather than as a social partnership with a community development
remit. There was a tendency for "advice" to be confused with "financial assistance" - and the
only interview refusal encountered during fieldwork pivoted on this distinction.

The issue of support constituted a clear thread within the study. Where indebted people
enjoyed the support of friends or neighbours, it was much easier to approach an agency for
help. The study also noted a knock-on effect that produced a stream of clients for the existing
service. In this case those who had been through the system were able to "befriend" others in
the same position. Community organisations and activists stood in as friends and for those
who were reticent this proved to be an advantage.

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Counselling seemed to work best locally, assisted by the existence of community resources.
But there was a consistent anxiety about privacy. Where people utilised existing multi-
purpose centres, it was impossible for an observer to know why they were making a visit.
Thus there was a general feeling against a dedicated centre. Money advice was the preferred
name for the service - less euphemistic than might be imagined. Several people specified an
additional preventative service dispensing advice prior to approaching a moneylender, or
taking out any kind of credit.

This study therefore recommends that the money advice service should continue to provide a
locally based service, which integrates with existing local services. It should try to develop
the befriending role within the community itself, and consider the use of community activists
from other estates in this regard.

The local aspects of the service could be boosted through provision of mobile units and it is
suggested that this kind of service is evaluated. Money advice through chance appointments
at given times - in the manner of welfare rights advice - could complement the service. This
would entail the development of a programme, gaining of a credible independent foothold in
communities and commitment to an interventionist approach. Additionally, the scope of
money advice should be broadened to include a preventative role. Clients who are
contemplating moneylending loans could thus explore alternatives with advice workers.
Workers should also try and ensure that clients take up their full benefit. The study has shown
that often gaps in benefit provision could extend to weeks. Ensuring that indebted people
have their full entitlement - including arrears or back-money that continue to be owed to
them.

A section of indebted people will continue to need increased practical assistance in

approaching agencies. An advice service should seek to involve community activists, and
utilise the confidence of those who have experienced success in making arrangements. The
development of a sound information system (with due regard to confidentiality) would aid
this task considerably.

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CHAPTER 6. Debt and the Community Response

From now on ... I will not run and hide

I'm going to face trouble with a smile
And let it pass me by
Tina Turner I smell trouble

6.1 Overview

The social world of Loantown communities is marked by private drama and public
conflict. Accompanying the significant danger to individuals in terms of deteriorating
physical and mental health is that of social deterioration of the whole community. This
chapter sets out to place debt services within a particular social context where debt
processes can be reversed and mechanisms examined. This task is made quite difficult
by the centrality of moneylending within the community. The link between
moneylenders and the community creates a kind of symbiosis. Where the two weave
together they form a mutually supporting structure. To remove moneylending may be
desirable, but will its removal weaken the structure - take away one element of the
ability to cope? A ban on moneylending would do no favours for the several participants
in the study whose creative management had reduced interest rates to a minimum.
Here we are looking specifically at an orientation designed to involve citizens in a
struggle against the debt process. Conditioned as it is by social benefits and low pay, the
process is social. It consists of human relationships. The ability of those participating in
FAS and Social Employment Schemes to overcome debt is not merely based on an
increased income but on social participation. How can society claim to be democratic
when a significant section of the population are stuck indoors and unable to take part in
its institutions?

I want to argue that the fallback options of the community, now represented by the
moneylenders, should be replaced by community action and that the network of
moneylending should be replaced with a community network. And I want to illustrate
some mechanisms that can minimise or prevent - not problems of low income - but its
social damage. Naturally, reducing unemployment and increased social benefits would
contribute to solutions. But it is difficult to envisage the kind of increase that would
eliminate the community's dependence on credit. In any case, the ability of ordinary
people to participate in the struggle for increased income and full employment is
severely limited by the social destructiveness of the debt process.

Finally, this chapter also an initial attempt to connect global and local debt. Here the
emphasis is on awareness, based on the notion that those who try to overcome debt in
their communities are better equipped to do when they are able to locate their own
position within a wider economic context

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6.2 Introduction

This chapter holds optimism for social change. This is rooted in the belief that people
have the ability to change life for the better. It's an approach that seeks to provide a
framework for those in community organisations - one that ensures that they do not get
tied down; which guarantees their independence and allows them to work at arms-length
from local and central state. Ordinary activists and volunteers in the community do not
constitute a cheap pool of labour for social care projects that are otherwise the
responsibility of the state. But through innovative work, they represent an opportunity to
breathe life into declining communities.

Loantown estates are typical of the peripheral housing of the late sixties. Sprawling and
with no clear centre, they failed to fulfil the vision of urban villages where residents
would benefit from a rural setting. With astonishing rapidity estates fell prey to problems
of vandalism, deteriorating environment, fear of crime, and housing decay. Family ties
and support mechanisms became more difficult to sustain where journeys were longer
and transport inadequate. Perhaps in response to this lack, the estates spawned a variety
of community groups - in certain cases within a framework of complex community
structures.

Loantown is subject to the same process, and exhibits a multi-faceted community

structure with strong partnership arrangements. Yet the community structure at
neighbourhood level seems to have been limited by the scale of the problems with which
it is faced. Although the opportunities for coping through participation do exist, a
tendency to orient passively to charitable organisations undercuts the impetus of local
community development. When the study's participants were asked whether they took
part in community activities many replied that they helped to collect money on behalf of
organisations. Although this has clear social benefits, without activity it represents a
passive approach to community work. Indeed within the estates in Loantown, donations
constitute a redistribution of resources between low-income households.

6.3 Debt workers: Breaking with tradition

It's your time right now

But I've got a feeling it's going to be mine
You know things have got to change
I've got to move on down the line
My time after a while Buddy Guy

A community development approach is based on activity, social commitment and

participative democracy. If debt is recognised as one of the major hazards facing the
community, then community activists need to co-ordinate activities to tackle it at a social
level. Already people in the community have reached a high level of disaffection, which
is beginning to express itself in anger.

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 I'd love to wait for the moneylender there on Thursday with a shotgun inside my hand. Should
I let off one round for a warning and two if he comes in any further? Because if this is what I'm
in, what are other people in?

Yet this same person said that he would like to be part of a committee to stop
moneylenders coming on to the estate. The dichotomy between the possibility of
violence and the possibility of development seems not too distanced. There is evidence
to suggest that potential for locally based action at neighbourhood level exists. So are
people prepared to use that potential? Participants in the study - in particular those who
had overcome debt - exhibited an enthusiasm about life. Where they began to take part
in the special accounts scheme, they experienced liberation. With debt payments reduced
to a realistic level, they could discharge their responsibilities over a longer time period.
But there was a sense of lived experience about their stories. One participant reflected
that she valued the experience. She had acquired knowledge - and with it a sense of
power and direction in her life. In particular she expressed a willingness to help other
people who were going through the problems she herself had overcome.

Most of my close friends give me support - they understand. It's moral support. Sit and talk -
or listen actually. It doesn't take away the problem - you still have to take a hold of yourself but
it takes a weight off the shoulders when people understand. I might even give advice because
it happened to me ...

This kind of support is crucial. The study has drawn attention to the social conflict that
arises within the community - so the experience of those who have been indebted can
help others to understand. Importantly, the success of overcoming debt can be
transmitted to others in the same difficulty. Theresa reiterates this point. Experience in
her community centre had equipped her for the kind of language used in her debt-
counselling interview. But she had speculated on whether it connected with that of her
neighbour.

To me the indebtedness programme is very kind of secretive. Not a lot of people know about
it. If it wasn't for (a community worker) I wouldn't have known it existed. Even though I was
involved in community things ... But someone like myself that's been through that kind of
system like - if they were able to hear stories from people like myself they would come in.
They would think, "If she can do it, then I can do it.” It would give them the motivation ...

This cuts across the grain of community conflict. It assumes that experience can be
generalised to others with similar experience. The communication mechanism here is
narrative. In a world where communications have become dominated by technology,
stories are still very powerful. They constitute the main driving force through which
journalism, television and film communicate ideas. Interviews in this study were
informed by the strong oral tradition that continues to exist in the country. Vivid story
telling communicated the lived experience of those who were struggling to cope with
debt. As such it constitutes part of the folk-memory of Loantown localities. This is also
important for community initiatives. All too often the processes of successful work in the
community are forgotten or obscured.

This has practical implications. Stories are part of the cultural equipment of communities
- an informal information system. But success stories can be used in a more
interventionist way, particularly where the storyteller is the heroine. The communication
of experience is a vital tool in the armoury of community development - where the
troops are citizens themselves. Carol is keen to talk about her experiences.

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 I like talking to people like you and to people in groups ... You see, all the information is in the
community centre but it didn't used to be. Each scheme needs something with people they
know. Because people demoralise you and treat you as stupid. They have leaflets with big
words. They won't ever write in plain English. My husband taught himself to read off the
newspapers and now he knows all these big words ... but before, I didn't know what spouse
meant!

Lay workers have proved extremely useful in many parts of the world. Communities
have been taught how to provide their own basic health care. Children have been trained
as dental technicians in Brazil; Young people (brigadistas) trained in vaccination, wiped
out the polio that was endemic in Nicaragua; The Terence Higgins Trust in the UK runs
a befriending scheme for those living with AIDS, entirely with lay workers; in China
ordinary villagers became "barefoot doctors". People have amazing capacities to learn
and to take responsibility. If partnership can mobilise the groundswell of enthusiasm
brought into being by its indebtedness scheme, the task of reducing debt will become
that much easier.

This is far from offering a soft option. People need training and support that in turn
demands resources. Again, Janet Ford's work for the Child Poverty Action Group1 draws
attention to the difficulty of maintaining funding. The extensive and successful Buddies
scheme referred to above recently suffered a massive reduction in core funding. But the
benefits are clear. The Community Development Foundation estimates that voluntary
work produces benefits that far outweigh the financial contribution of core funding1.
Numbers of voluntary workers can increase through the "multiplier effect" whereby lay
worker creates lay worker. It is an irony that this is akin to the way in which
moneylending works - entirely without advertising, a network spreads through
recommendation. The aim here is to reverse that spread, supplanting it with a positive
social programme; a programme that should be nurtured and grown organically within
the community itself, with strong support structures in place to cope with the stressful
nature of the work.

Several participants in the study argued that a money advice service work should also be
preventative; that had they realised the consequences they would never have become
involved in debt. Although this begs the question of how people in the community
mobilise emergency funds, there is certainly a case for work at the primary level. Just as
the participant who stated that he would like to work on a committee to stop
moneylending on the estate, others signified a willingness to attend a public meeting on
the question. This campaign-style approach is not only useful in mobilising public
opinion, but alerts vulnerable groups to the dangers involved in moneylending.

How can this be achieved? If the potential exists within the community - and the study
suggests that it does - it needs encouragement, stimulation, facilitation and support.
Many community development workers have called meetings only to find that their
audience comprised only other community development workers! Groups already
contain the key activists needed to construct an anti-debt strategy. The existing network
of community groups in Loantown’s localities need to be brought together. They need to
ensure that their own links with the community are strong and that they co-ordinate with
each other at neighbourhood level. The role of community development in this case is to
ensure that the locality or neighbourhood can work on its own. The aim is to move on,
leaving behind a self-supporting structure.

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A partnership can draw on the strong tradition of voluntary work in Loantown localities.
It is recommended that funds be made available for the training of lay workers in debt
counselling, basic budgeting and befriending. Such a scheme should have its own
budget, administration and adequate support structure. Additionally, in recognition of the
lived experience of indebted people, that case histories play a central part in training and
counselling; that workers are sensitive to the language, argot and communication frame
of indebted people.

It is recommended that the potential for further neighbourhood community development

work in Loantown localities be examined, and that the question of a campaign to
increase involvement and participation and communication be tackled. It is further
recommended that a campaign to reduce the reliance of the community on
moneylending and restrict penetration of unlicensed moneylenders on Loantown estates
be explored.

6.4 Community needs

"Every Monday morning, somebody knock on my door

That old furniture man, trying to get what I owe"
Dollar Down blues Barbecue Bob

This addresses the question of basic community needs and how these needs can be
satisfied within the community. Participants in the study were asked if their indebtedness
prevented them from having things that were really needed. Responses described need in
terms of basic necessities for the house. Where participants had acquired multi-debt
there was no flexibility to buy replacement items. If a washing machine or a television
broke down it couldn't be repaired. Homes tended to have linoleum floor covering, and
were generally in a poor decorative state. Houses themselves are now in poor repair and
as they deteriorate, the estates look shabby and uninviting. For several participants in the
study, broken glass in the front door contributed to cold and damp within their houses.
The proximity of abandoned houses on two estates had encouraged the spread of vermin,
including rats. In one case they had eaten through the hall skirting board in the interior
of the house.

It's dangerous round here. We live in the bad part - burnt out bungalows. I got my window and
my doors in. I had to get plastic glass in and a new door because it was kicked in.

For people in career debt, the pleasure of consumption is partially denied, although it is
certainly conditioned by an all-embracing culture of advertising. The market offers
goods that consist not only of themselves but come equipped with meaning. Purchasing
of special confirmation clothes may form part of a ritual, marking transition. But when
an indebted person goes to the moneylender for Raebok trainers (tackies) she is buying
into a set of images - a world of straining muscles, sweat and physical achievement1. For
the young person who requests the expensive designer shoes on the basis that others at
school are wearing them, this represents a "sharing" - a mutual pleasure in consumption
of shared meanings. To be denied this sharing is to be set apart, and diminishes
relationships with others. Being "set apart" is typical of living with debt. Where homes

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and contents deteriorate, morale in neighbourhoods sinks. People who live with debt
already feel trapped and moneylenders are aware of this. As several participants pointed
out, their clients aren't going anywhere.

I don't see why I should let my house go to rack and ruin or go round dirty. I don't see why I
should buy the cheapest of the cheap. I don't see why I shouldn't have a telly, couch,
ornaments, electric fire - just because I'm on a cheap income. It might take me a while. I might
get into debt now and again. But Jesus where am I going? Fuck's sake I'll always live in a
Local authority house - they'll always find me somewhere. If they don't find me down the ESB
they'll find me at the local authority -because they'll always be my landlord.

Often the original cause of debt, much moneylending debt was consolidated through
furniture and domestic goods credit sales. And although charities do provide household
furniture there is little sense of the choice that makes acquisition a pleasure.

They give you beds if you haven't any. I'm waiting for a bed to come ... They got me a couch.
They got me a television too but after 3 weeks it blew up.

Dolores was asked what she thought she really needed - as it turned out she already had
it. Already in multi-debt she had recently entered into a new deal for a chair. Most
importantly she was shown a catalogue and chose her chair. Now in pride of place in her
sparsely furnished front room, it had acquired a significance that extended beyond its
function. Where families support family members through small gifts of soft furnishings
or clothes, articles take on a different set of relationships. They have a different cultural
value from charitable donations. There is a real sense of hurt in making an approach to a
charity and being rejected, or a feeling of resentment if a donated article is defective.

On some peripheral housing estates where people are moved from the inner city, often to
their first real home, furnishing the house has created real problems. One solution is to
establish a furniture bank. In one case, two volunteers with a van solicit, collect and store
donated furniture in a warehouse space belonging to the housing authority. The
warehouse then operates as a furniture warehouse store that is open to all prospective
purchasers. People can view available items, choose what they need and are asked only
for a small donation. In practice there is no requirement to pay anything, and often the
housing authority will subsidise new tenants by paying a donation for them1. The
importance of this idea lies in its minimisation of the "charity effect". By replicating a
furniture store, it's able to offer a choice, and "buyers" can make a small contribution. So
it neatly sidesteps the question of pride, caused by becoming the object of charity -
people become consumers not recipients. It allows better-off areas to subsidise poorer
ones through an intermediary and in this way negates feelings of degradation or
humiliation. And it restores an element of pleasure.

In the study indebted people took a real pride in their ability to restore and recycle
articles. Whilst obviously virtue is here rooted in necessity, this recycling is vital to
limited budgets - and now has a wider and positive meaning in society. Action in the
community can draw from this experience and from expertise in the community. It can
work towards establishing the kind of local recycling industries now popular in the
United States.

The rejuvenation of housing has played a great part in restoring a community's sense of
morale. A Community Development Foundation project in partnership with Rochdale's

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local authority transformed the look of a whole neighbourhood through "enveloping"
existing housing in new exteriors1. It was a successful initiative that involved the whole
community. Through cosmetic changes housing authorities claim to have turned estates
around, halting environmental decay, decreasing crime and promoting a sense of
ownership for residents. Again, drawing on the pool of experience, which already exists
in the community, it might be possible to construct a scheme that combines local
unemployed workers, existing workers, the local authority, and central government. In
this way the housing stock is improved.

The study showed that indebted people are keen to discharge their responsibilities. They
want to pay off their arrears but they cannot envisage how this might be achieved. Many
speculate that if only they could start again they would not get into debt. An arrears
amnesty provides a partial solution, but may create a sense of unfairness for those who
have struggled to keep up with rent payments. If it were possible to tie reductions in rent
arrears to work within the community (in a non-authoritarian voluntary way i.e. no
compulsion), it would represent an exchange rather than being "let off". This salvages
self-respect, extends the social world of indebted people and brings the employed into
contact with the unemployed.

Alternatively it may be possible for partnership to act as broker for community debt.
Here, the community development organisation buys the arrears from the Local
authority on behalf of the community. This is analogous to national schemes where
entrepreneurs buy development rights by cancelling a proportion of national debt. The
arrears amnesty is underwritten by community development organisations. In return they
guarantee to develop community schemes that are participatory and democratic in
character and increase the well being of the community. The gain for the Local authority
is not only improved community infrastructure. Collective support structures should
emerge to provide a primary preventative system that minimises initial arrears

Construction and renovation work has been undertaken successfully in community self-
build schemes - some specifically involving the homeless. Again this needs organisation
and resources. But if current employment schemes could shift focus to the local level,
there may be scope for adaptation. Existing partnerships are in a favourable position to
mobilise the agreements between localities and central and local state that might explore
and facilitate this possibility.

In areas of high unemployment and multi-debt there is a tendency for people to become
invisible. In the process their talents are also hidden. It is recommended that the local
partnership explore the viability of community provision that utilises the existing skills
of indebted people in the community. The aim is to break down isolation, restore dignity
and pride and create a sense of shared ownership of neighbourhoods and localities. Some
voluntary groups have established a skills directory, and it is recommended that this
concept be explored.

In particular it is recommended that the local partnership, enter into discussion with local
charities with the intention of providing a different focus for existing donation practice.
It is recommended that charitable funds in part be channeled into more permanent
community facilities with broadened participation. A furniture bank could be managed at
community level for example.

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It is also recommended that partnerships explore the possibility of arrears amnesties
based on exchange. The aim is to ensure broad fairness in the whole community, and
through the opportunity to discharge responsibilities, gives those in arrears a fresh start.
A tripartite partnership between central state, local state and the localities offers an
injection of resources - in a sense "seed funding" whose aim is to "boot up" community
development. This needs the involvement and cooperation of the social partners - trade
unions and the business sector. The latter may well offer scope for sponsorship in
material resources.

6.5 Awareness and transformation

The possibility of change is limited not only by the need for continuing support
structures. If there is no desire for change, community initiatives such as the special
accounts scheme, community resources and so on become bolt-on options. In a "worst-
case" scenario, these initiatives too might be sucked into career debt processes. The
study shows that participants are afraid to lose the emergency stand-by option of the
private moneylender. In cases where the Credit Union loaned money to clear bills,
participants often integrated this into their debt-management system. There is nothing to
stop clients of the new scheme retaining moneylenders. Within the framework of low-
income and poverty, an emergency could force them at any time to revise budgets.

In general, participants in the study showed a lack of awareness about debt. Within
career debt, the mechanics of top-up loans, the difference between licensed and
unlicensed moneylenders, interest rates, collection charges and the benefit system were
reduced to pragmatic responses. Most importantly, there is little acknowledgement of the
social and economic framework that determines income and spending. If people and
communities are not aware of such factors, how can things change? The struggle against
debt is more often defined as a personal one. The individual is encouraged to assess her
income and expenditure and to make changes and arrangements. We have also seen that
in some cases authorities prefer to make private and individual arrangements ("don't tell
your friend"). This restricts the community of experience. The general tendency to work
on individual cases further isolates the individual from a sharing of experience. But
where cases were the result of a network of neighbourhood referrals, linked by a
community resource, there was an acknowledgement and awareness of debt as a social
issue that could be tackled collectively.

A participant described her moneylenders as "These tricksters that aren't registered!

These fellas that live down in the red brick houses." The comfortable Victorian Villas
near the centre represent a visible polar extreme to Loantown's peripheral estates. It is
recognition of a spatial and economic determination where interest on moneylending
loans drains available cash away from the peripheral localities towards the centre. But it
is not merely that the potentially violent response of a moneylender enforces a priority
on borrowers. In the process, the flow of cash is diverted away from the local state and
state utilities. The local state is forced to borrow to ensure housing maintenance and
administration, electricity supplies and so on.

Thus local debt could be seen as linked to institutional state debt. All parts of the system
pivot on the relationship between the periphery and the centre. In Andre Gunder Frank's
view, the centre (the metropole) develops at the expense of the periphery1. There are

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various elaborations of this relationship. A recent comparative study by the NESC1
places Ireland's socio-economic development between central and peripheral
development. It points out that by 1988, the indebtedness of Ireland was much higher
than any of the other contrast sates in the study. At 133%, Ireland's debt/GDP ratio was
the highest of any industrialised country with the exception of Israel (OECD Economic
Survey) Additionally, a critical article on the relationship between debt and welfare
describes political vote catching of the 1970s and 1980s as resulting in a spiral of
overbids in terms of welfare benefits and reforms, increasing the national debt burden1.
Certainly we can see how increased borrowing requirements commit nation states to
reductions in state spending. Whereas '70s political stability made Ireland a more
attractive borrower for Eurobanks than third world economies, the '80s recession with its
accompanying high interest rates and inflation forced austerity policies and crisis control
of public spending. As this impacts on welfare and housing initiatives, the local and
national state system becomes inflexible - it has to service its own borrowing
requirements and thus at a local level its measures to recover arrears become
increasingly draconian.

This formulation provides one of a number of ways to generalise local experience to

national and world problems. It is important that those who blame their indebtedness on
the level of state benefits become aware of the global system that determines these
benefits. The moneylender rides on the back of a periphery-centre movement of finance
in which the net cash flow away from the community is in his favour. It's a process
whose eventual centre lies neither in Loantown nor Boomtown but in the world banking
system. Intervening in that process represents a collective gain for individuals and the
community. So where Credit Union and similar community initiatives help to retain and
circulate money locally, their actions are de facto critical of the way things are.
Community development can encourage that critical edge through raising awareness of
local/global relationships during education and training.

Joyce O'Connor's study of development in West Loantown clearly outlines the

importance of global understanding. She points out that what is happening may be more
meaningfully interpreted and understood if it is placed in a national context. If the
relationship between local and national centres can be traced it helps to bring the system
into focus. Without understanding the mechanisms of change, she emphasises, it is
impossible to fully appreciate alternatives in policy. This awareness is not merely limited
to policy but extends to everyday life. To be able to cope effectively in the face of
change, it is necessary to investigate its direction and pace.

This study suggests that those who showed a critical understanding of debt processes
were more likely to succeed. Where participants began to explore community solutions
to problems they came into contact with a milieu in which the way things are is
constantly challenged, where problem posing and solving is integral to collective
thinking. Through this process of conscientisisation, community development can aim to
increase the awareness necessary to promote sustainable change.

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6.6 Conclusions

This chapter has dealt with the possibilities for response of indebted people within their
own communities. The study stresses that there is a desire to take action; to contribute in
ways that both fight indebtedness and tackle it at a preventative level. The study finds
that those who have recognised their own situation and who have come to an
understanding of the social processes that shaped it, have been sensitised to the
possibility of community action. Those who had participated in anti-debt measures
showed a willingness to act as lay advisers, to serve on committees or to attend
meetings. Those who (through hindsight and debt counselling) identified ways in which
debt could be avoided, were willing to pass the information on to others as a means of
preventing indebtedness.

Hence this chapter also suggests a range of self-help measures through which people at
neighbourhood level can begin to tackle aspects of their position. This seeks to
transform the passivity of what the study identifies as the charity effect. The study's
participants indicated that charity handouts lower their self-esteem. Clearly, articles
received as charity have a different cultural value from those chosen and paid for
independently, or re-cycled within the family. Whilst acknowledging the time, effort and
commitment of those voluntarily operating charitable agencies, the study suggests that
community self-help measures would serve to ameliorate the degradation felt by
recipients.

This chapter identifies "talk" as one of the main ingredients in community anti-debt
strategy. Lay advisers, support groups and estate meetings can focus community
knowledge and contribute to a social response to debt. The study also suggests that such
measures as community self-build for renovation of housing could operate in
conjunction with a rent arrears amnesty and that socialised redistribution schemes such
as furniture banks might reduce the humiliation of requesting, and the stigma of
accepting charity.

The wider question of social and economic context has also been introduced in this part
of the study. Whilst this could provide a focus for the development of an economic
theory of indebtedness, its purpose here is to foreground global understanding as part of
awareness raising in the indebted community itself. Some participants in this study were
aware of the social and economic forces underlying their predicament. It was they who
showed a greater capacity to overcome indebtedness.

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CHAPTER 7. General conclusions

The study began by drawing attention to the level of contradiction that exists within the
social world of indebtedness. In contradistinction to stereotypical notions of
indebtedness that describe indebted people as feckless, lazy, unable to cope, the study
reveals quite the opposite. We see a group that lives on a knife-edge where an
emergency - ill health, unemployment, or any kind of glitch in their benefit payments -
can pitch them into a path of career debt. Yet this group is tackling the problems of
living on low-income and welfare dependency, managing the situation with a great deal
of inventiveness and determination. Thus the study stresses the active side of
indebtedness - the ability to survive and to manipulate the system in a coping and
management response.

In particular the study notes the tendency for opposites to merge. The need to retain
emergency sources of credit draws those who are indebted to have continual recourse to
licensed and unlicensed moneylenders - their only source of extra funds. In this situation,
moneylenders are encouraged, tolerated and despised, all at the same time. They are
despised for offering exactly what the borrower wants, and all the more for offering it
too easily. In this way, the borrower and indeed the indebted community become both
victim and collaborator in a process, which ultimately deprives the individual and the
community of available monies.

This is very much a social system where actors are aware of the relationships into which
they enter. Yet the study also stresses elements of passivity - characterised by
helplessness and reliance on benefits. Typically, indebted people are drawn to view help
and assistance as being exclusively the gift of others. Here a social response is
characterised by a collective waiting. "Something should be done about it." is a common
enough response. Indebted families living on low-income housing estates engage with a
complex array of benefits and voluntary assistance and this has become a normal and
continuing part of existence. The competition for scarce resources (benefits/social
assistance/voluntary help) serves as a focal point, which tends to fog and obscure the
social and economic relationships that determine indebtedness. The result is a paranoia
and suspicion that damages the social cohesion of neighbourhoods.

Failure to receive timely payment of benefits played a considerable role in enforced

borrowing. This pitches individuals and families into a borrowing pattern that they are
unable to control. Improvements in this system could therefore promote reductions in the
commencement of indebtedness. The range of benefits provided by different agencies,
coupled with a lack of clarity about entitlements and discretionary payments, serves to
increase hostility and suspicion amongst indebted claimants. The latter plays a part in
increasing the isolation of indebted families. Hence a move towards a rationalisation of a
benefit system, which becomes more transparent - one who’s functioning is visible and
understandable -would both increase legitimate take-up and reduce neighbourhood
conflict.

Through acknowledging the many-sided reality of indebtedness existing within the

generalised context of low income, the study is compelled to suggest approaches that go
beyond traditional welfare "top down" measures. Of course, there can be no doubt that

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welfare initiatives are necessary in rescuing those who have reached the stage of crisis
debt. On the other hand, there exists the certainty that this approach alone will never
tackle the root causes. We are forced to face a system, which will continue to produce a
queue of "clients".

The local partnership is charged with tackling the social exclusion of whole
communities. It has drawn together both existing social agencies activists in the
community within a strategy that seeks to integrate initiatives at neighbourhood level,
traditional client-centred social work and at the level of social policy itself. The study
too, has tried to make recommendations at all these levels. Through looking at the
process of indebtedness we have identified those avenues most likely to produce lasting
changes. The study clearly identifies the breaking down of isolation that occurs as a by-
product of state-funded employment courses. The reduction in isolation of indebted
people through similar community measures is seen as one of the most important of
current initiatives. Without this, a money advice service can only hope to tackle
problems at the level of referral - itself a product of crisis debt.

The special accounts scheme has been successful in this respect, since it presents an
opportunity to intervene before the stage of crisis debt is reached. Its high community
profile guarantees it a particular status in the array of anti-debt measures in Loantown.
The study shows that those who participated in the scheme benefited both financially
and psychologically. But without a strategy and framework aimed at providing
community support for participants, the possibility remains that it will become a
problem-solving agency only for the individual. The study has therefore suggested that
organic links with the community are extended, particularly on levels of involvement
and participation. Studies that have tackled the question of coping and management at
neighbourhood level, stress the need for communities to feel a sense of ownership and
independence concerning projects. Moreover, it is suggested that these are likely to be
more successful. The study has recommended that lay workers be involved in debt
counselling, and indeed that those who have successfully resolved their own
indebtedness are well placed to carry out such tasks. Such workers may be well placed to
provide much-needed support for entrants to the special accounts scheme.

The likely use of a money advice service was examined closely. In particular this
revolves around some basic polarities. Should it be local or central, open or private or
even secret? There is no single answer to this question. Those wishing a central service
wanted to increase their level of confidentiality and this was rooted in a desire to
distance personal problems from their neighbourhood. Yet there exists a core of people
who prefer a locally based service with which they feel more familiar and comfortable.
Linked to this, the need for support, advice and advocacy was expressed throughout the
study. Often this was achieved through the help of a friend or near neighbour, but also
through key community activists, often voluntary. A central service operating in
conjunction with an outreach programme which seeks to put down lasting roots in
neighbourhoods appears the most likely to meet the needs of indebtedness. The
orientation of both the Health Board and area-based partnership offers the opportunity to
develop this flexible service.

Those coping with indebtedness acknowledge the need for education at a preventative
level. Those who have lived in families for whom moneylending was traditional are
likely to quickly use this readily available credit, particularly where independently

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setting up their own home. With hindsight they would like to have been made more
aware of the likely repercussions. Education programmes at school and community level
can therefore play a part in sensitising individuals to both dangers and alternative
options.

Those working with indebtedness in the framework of low-income and benefit-

dependence are all too aware that structural changes within society are necessary. But
changes in the economy - such as boosting employment opportunities - constitute a long-
term measure. Thus the study has attempted to suggest a variety of social community-
based measures that could serve to alleviate some of the problems faced by people
tackling their own indebtedness. That is not to say that those who are living on low
incomes or who are faced with benefit-dependency should settle for second-best. It is an
attempt to develop, through community activity, a sense of the social; to break the
tendency to become insular and home-centred; to engender solidarity in the community
that may become instrumental in breaking the stranglehold of debt.

I have described the indebted as being in stasis. Nothing is moving. Again a typical
response in relation to creditors is "Well I don't know why they worry. I'm not going
anywhere, am I?" At the risk of developing a functionalist analogy, neighbourhoods and
localities have to increase their social metabolism. Things have got to keep moving so
that the community remains alive. The low-income, welfare dependent communities are
sinking into a passive relationship to the economy. They are at the mercy of economic
forces with which they are unable to cope without borrowing. How can they break with
this and develop a critical attitude to what is happening? How can they develop a
response that is not merely the response of agency but of the community?

Partnership based organisations have an opportunity often denied to mainstream state

agencies. Through independent funding they can offer a developmental approach, which
aims at high levels of participation. For example, with the assistance of the employment
and training agency FAS, a partnership-sponsored initiative has involved lone-parents in
community outreach work. In this way they help to break down the division between the
helper and the helped and between paid worker and volunteer. It constitutes a bottom-up
approach in which neighbourhoods and localities can have more sense of ownership.
Social programmes are operated by them, rather than at them.

In a workshop designed to assess results of this study, participants from agencies

affected by indebtedness problems identified key areas of difficulty and opportunity.
Activities such as a free "debt-line" telephone enquiry service; support groups and
development of skill banks in the community were identified as possible areas for
development. Ways of increasing flexibility and communication between agencies were
also targeted - community contact networks for example. The Loantown Debt Forum has
provided an opportunity for organisations to share experiences, formulate joint
approaches to indebtedness and to begin networking.

The more visibility these kinds of initiatives attain in the community, the more chance of
increasing participation at neighbourhood level and logically the better the chance of
success. If the area-based partnership can maintain its multi-strategy momentum, it will
serve as a model for those countries within Europe which are experiencing similar
problems of indebtedness and social exclusion.

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