Sunday, 20 March 2011

Spoon free

Yesterday, my youngest son asked me why no-one ever mentions the spoons. Initially I struggled to follow his thinking but, with a little more nine year old logic imparted, it became clear  he was referring to laying the table and emptying the dishwasher. Until this point I not given "spoon status" any thought and indeed struggled to explain why they were rarely mentioned. It did, however, help me realise there are certain things that rarely get a mention in spite of being a large part of our everyday lives.

Debts most certainly fall into this category. The individual rarely speaks freely about how much they have borrowed or how they are managing to service their debt and often assume the lenders would not lend unless they were sure their money could be repaid.  During my time as a consultant in the financial services industry I regularly discovered many clients had no real understanding of the terms of their loans let alone how much they had borrowed. The focus of the companies offering these lines of credit was always on what the loan could buy and how quickly it could be arranged. By passively encouraging the individual to give little attention to the financial commitment or their ability to pay the "Let's face it they wouldn't be offering it to me if they didn't think I could afford it" attitude has been perpetuated. Factor in the temptation of discounted payments and payment free periods and it becomes a financial candy store of "money for nothing". Such an irresponsible lending attitude is precisely the reason a large number of people currently find themselves in financial free fall.

I wish I could say it was this naivety that caused our own downfall but sadly, I don't believe it was. I think my 45 year old exceptionally intellectually able husband believed he was sufficiently savvy to be able profit from banking greed and be home and dry before interest payments began to bite. Over estimating his abilities on many levels for many years allowed him to romance himself into thinking, "They would not be lending if they did not believe the business was viable".  In reality, I have since discovered, the banks and credit card companies didn't care. They were happy to lend to virtually anyone as long as they owned their own house and had a clean credit history.  I believe my husband fell under the spell of his own smoke and mirror show and only woke up to the nightmare he had created when his brother died. By this time our unsecured debt was close to £1,000,000.

I also believe, in his mind, our predicament was unmentionable to anyone, most of all me. I had been singing the praises of his endeavours for years to friends and family, not least because I genuinely believed he was doing really well. He regularly discussed the business and his plans for its future with me and this future looked bright. I even had the impression that I was being involved in the decision making, albeit not the day to day running of things. Never once did I ask for documentary evidence because I trusted him implicitly. Little did I know he was only talking about his dreams and not the unpalatable reality. With hindsight, I became an accessory, and because of my confidence in him, and my personal track record as a business woman, our family and friends had even more faith in his abilities than perhaps they would have done otherwise.

It came as an immense shock to discover many of these very same people had been asked to help finance his business in the years running up to the credit crisis but it was as an even greater shock to find he had borrowed from everyone who had said yes. It was, however, humiliating to be made aware of this when speaking to friends and family for support only to find I was faced with the question as to when we would be able to pay them back. For me it was nothing short of having the ground whipped out from under my feet.

I firmly believe I would and could have saved us if I had been made aware of what course my husband had set for us sooner. If  only it was socially acceptable to talk openly about debt our friends and family may not have been paralysed by this unwritten decree that forbids personal finances from being openly discussed. I may well have had the opportunity to make the outcome for our fragile ship on what became overwhelmingly stormy waters a very different but,..... they didn't and I didn't and we are where we are because there are some things that are rarely  spoons.

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