Can Debt Consolidation Cure Debt Addiction?

By Gina Pogol
Mortgage Credit Problems Columnist

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Recent studies show that between ten and fifteen percent of the population has some inborn tendency toward addiction. "Individuals will get some kind of high from an addictive behavior like shopping," states Indiana University's Ruth Engs, EdD. "Often times a person will spend over their budget and get into deep financial trouble, spending well above their income," says Engs. "The normal person will say, 'Oops, I can't afford to buy this or that.' But not someone who has an addiction."

Debt consolidation isn't enough if you have shopping addictions or other destructive behavior patterns. You may get the creditors off your back and lower your monthly bills temporarily, but left unchanged your current behavior will take you down deeper than before. If you are a shopoholic or have gambling or other compulsions, you need to find help altering your behavior in conjunction with debt counseling and possibly consolidation.

Here are some signs that your shopping habit may have morphed into a serious compulsion and you need to go beyond home equity mortgages, debt counseling, and debt consolidation loans:
  • I just had to have it.... If you regularly go out for stuff like shoe polish and come home with a dozen pair of shoes instead, you may be losing control of your spending. Addicts often describe a rush of euphoria when they spend, and this feeling reinforces their desire to shop even more.
  • Budget? What budget? If you consistently buy things you know you can't afford, even if you return them, you probably have a dysfunctional relationship with shopping and money. Addicts report feeling guilty, ashamed, and anxious about money following a spree. Routinely blowing the budget can lead to bad credit, bankruptcy, even the loss of your home.
  • The truth? You can't handle the truth! Shopoholics may hide purchases, open secret credit card accounts, lie about how much they paid for something, and isolate themselves from their loved ones as they obsess more about spending and covering it up. Their relationships might be marred by frequent arguments about spending.
Twelve step programs like Debtor's Anonymous or private counseling can help you get hold of the psychological issues underlying your addiction and get them under control. A debt consolidation or home equity loan can be an effective strategy against addiction as part of a comprehensive lifestyle change--otherwise it's just a band-aid that only allows you to get into more trouble.

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