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19 Apr, 2009

Coaching Through Debt

Posted by: The Coaching Academy In: Coach Plus Articles|Coaching Articles

Coaching Debt - Coaching Blog

I can still remember the day vividly: it was January the 3rd 2006. It was a cold, miserable day and I felt hopeless, guilty, scared and ready to run away from my life and all of my problems.

So what changed for me that day?

Well this was the day that I took charge of my life and admitted that I was in debt and I mean serious debt. That day I decided to stand up and use all my Coaching skills to help me get through my debt. I took my head out of the sand and faced up to the mountain of debt that I had built up and ignored over the previous few years. And because I made the decision to take my head out of the sand and face up to my debt, it became not only one of the most frightening days of my already eventful life but it also turned out to be the turning point in my life.

That day when I finally faced up to my financial problems I realised that I had been living a lie and that my external trappings were nothing but a sham: My wife, children and I had all the trappings of success; a nice detached home, two luxury cars, the clothes and the home furnishings to go with it, but along with this I finally opened my eyes to the actual cost and the weight of debt that hung around my neck all £80,000 of it. Now I’m going to admit to you now that when I actually took the blinkers off and looked at my bank statements and bulging overdraft, my credit card bills maxed out to the hilt and how my incomings and expenditures didn’t match up, and I mean didn’t match up by nearly double what I had coming in, I felt an overwhelming desire to run away, a fear of failure, guilt, embarrassment and pain. I remember how I sat in my garden and wept solidly, not knowing where to turn and what to do.

How would I tell my wife the full enormity of our problem? What would happen to our relationship? What would happen to our home? How can I put food on the table for my kids? How do I pay my bills this month? Yet here I am nearly three years later, a very happy, wise and discharged bankrupt. I am closer to my wife and we talk more than we have before. I am extremely lucky enough to still have my home. I have no debt apart from my mortgage and have no intention of taking on any more ever again. But most of all I have enormous self respect.

So what changed? How did I do this? Did I win the lottery? No. The only thing that changed was me having the guts to take my head out of the sand and face up to my problems. That was the day I decided to coach my way out of debt. That day back in January 2006 was the day I started to take back control of my life and my finances. Without doubt the hardest part of dealing with debt is the first time you take that long hard look at yourself and face the full enormity of it, but, believe me, once you have done this, even though you may feel scared and immense guilt and embarrassment, you will soon come to realise that you’ve overcome the hardest part which is actually taking that first tentative look around and as a Coach I tell my clients this nearly every day, but now it was my turn to be honest and open with myself.
Now when clients come to me to help them with their debt problems, many of them are expecting me to ridicule them for the terrible mess they are in and tell them how they’re going to get deeper into debt and that it is destroying their life and that they have no thought for themselves and others. Now many of you based on your own values may think this way and that’s fine, but that’s not the way I work and I don’t believe in wasting my time with that approach, even if its true. Those tactics will only go to ensure that they remain with their head in the sand as I did and, if those tactics were going to help them, then they would have already taken control of their finances.

Now there is a common misapprehension by the so called know-it-all’s, media and professional financial fraternity that most people get into debt because they choose to, they have no self control and that they do not have the ability to take control of their life yet alone their finances. In a lot of cases this may be true,  yet I believe that the majority of people who are in debt, and there are hundreds of thousands of you out there, no more choose to be in debt than alcoholics decide to become alcoholics or drug users decide to become drug users. It may be true that they choose to keep their head buried in the sand and ignore the debts and the problems surrounding them, hoping it will just go away, but I truly believe that no-one actually chooses to be in debt.

In fact the only thing that prevents us from facing up to our debt is that old favourite FEAR!

That fear is that you will have to survive an indeterminate period of misery and ridicule, depravation and pain and guilt in order to be free. Fear that you’ll never be able to live and buy things again, fear that you’ll never be able to face your friends and family because of the embarrassment, fear that you may lose your job or your home.
If, as I did, you have tried to control your finances by borrowing, asking for extended overdrafts and larger credit card limits, you will not only be affected by that fear, but you will be convinced you can never quit.

If you are embarrassed, panic-stricken or feel that the time is not right for you to lift your head out of the sand, then let me assure you that your embarrassment or panic is caused by fear.

That fear is not going to be relieved by taking on more debt: the fear is created by the debt in the first place.

So when are you going to take back that control and face up to your debt? Tomorrow? Next week? Next month?

Stop kidding yourself! The time to change is today, not a moment sooner, so stand up, take a look around, face up to your problems and take back that control of your life.

Now if as I was, you find yourself coaching clients who are overwhelmed with huge amounts of debt do not panic. Getting your clients to face up to debt isn’t anywhere as bad as you think, and there are many solutions available. Equally, do not allow them to bury their head in the sand and hope it will go away… won’t I know from first hand experience!

The debt problem will not just vanish so as coaches we must guide them in tackling the problem head on before it gets even worse. Likewise, getting out of debt does not happen all by itself either. Well, even if it does happen accidentally (like a person winning the lottery) debt problems are rarely solved long term unless and until the person with the debt starts to think about the debt in a different way. They have to “Own” their debt.

When you start coaching a client through debt, you will find a lot of clients behave as though their debt belongs to someone else. And maybe it did, in a way!  Some clients get into overwhelming debt because they wound up with the debts of a spouse (or ex-spouse).

Some clients end up paying off the debts of family members. Others get into debt when a house burned down or one of the families suffered a medical problem. No matter how they wound up with the debt, they have to accept it as there’s and no one else’s. They have to take responsibility for it to overcome it.         Now there are lots of reasons that people get into debt. Even if they just spent their way into debt, they probably had a lot of good reasons for spending the money. Maybe they had a lot of debt left over from a previous relationship. Maybe they were under intense emotional stress from home or work and found “retail therapy” made them feel better.

Maybe they just did not understand money.

There are hundreds of reasons for every time they spend their money, but that’s not the point. The point is: The debts are theirs. They need to take responsibility for them. Your clients won’t ever get out of debt till they admit that they (not anybody else) are in debt.

Now before i start coaching my clients how to get out of debt, I always make sure that the first step for my clients is to buy themselves an A4 journal or writing book, because this is going to help them see exactly where they are, where they need to be and it will also give them the chance to write down their thoughts and feelings.
The first thing i get them to do is to write down the date and their name at the top of the journal. Then on this first page I ask them to write down openly and honestly, exactly why they got in debt and then more importantly I ask them to write down why they have to get out of debt and what would the consequences be if they carried on living a lie and remaining in debt.

The reason for this is two fold. It is all right talking about your client’s debt and what state they are in, but they need to write it down so that they OWN it and that they can see it every day so that they never slip back into that trap again. As I said you they to own it and writing it down in plain site is an excellent way to reinforce their desire to become debt free.

The second reason that you need to get your clients to use the journal is so that they can keep total track of everything that they spend. Once again they need to be able to see at a glance where every single penny they spend goes.

So what are the seven stages to getting out of debt?

  1. Honesty - The first and most important step to take control of their finances and becoming debt free is to be honest with themselves – and I mean totally and brutally honest. That’s why Ive titled this step ‘Honesty’ because without this they are doomed to fail. From my own personal experience I would say that this is the key to tackling debt; being honest about your situation, being honest with themselves, and their family is the key to success and financial freedom.
  2. Work out their Income and Expenditure – So how do I get them to do that you may be asking. Easy, during your session you give them a pencil and paper and ask them to write down in their book everything they owe and everything they pay out. They can’t get out of debt unless they know exactly what they pay out each month.
  3. Look at ways of maximising their income  -It is surprising how many people don’t claim for what they may be entitled to. Is there anything else they can do or sell maybe? What other skills have they got which can earn money? How far are they prepared to go to get out of debt? You need to ensure that your clients are prepared to be able to do whatever it takes to move forward as long as it’s legal and wont cause them any harm. This is one of the steps that sorts out the person who will against the person who may. It boils down to hard work, damn hard work, but it is so worth it.
  4. Look at where you can cut back -Now comes the hard part. It’s time to look at their spending and work out where they could make savings. They will probably find that it’s not that hard and a few small changes can cut their expenses significantly.
  5. Prioritise their debts – Meeting the repayments each month on the essential services such as mortgage, gas, electric and council tax bills should be their number one priority. Pay off credit and store cards with the highest interest rates first. Always consider priority debts first. This financial statement will tell them how much money they have left over to pay towards their debts. From this they can then work out what to pay to each creditor.
  6. Contact their Creditors – Get them to Contact their creditors immediately and start making regular payments to their creditors, even if they are small. If the creditors can see they are committed to sorting out their debt, then in the majority of cases they will give some leeway while they figure out their long term repayment strategy. Many companies are sympathetic to those who cannot afford their repayments. Recovering debt can be expensive and they are often willing to work out an agreement which could immediately ease your clients mind and save them the trouble of taking them to court. There is no reason why they cannot do this themselves. Give them the support and confidence to lift their head out of the sand.
  7. Work out their plan of action – You need to guide them to decide how they are going to deal with their debts not only in the short term but in the long term. They have to decide what they want (goal) and how they are going to get there. Its not enough to just know what they want to have, as you all know, they have to have an action plan, an action plan should basically tell them what they can do every day to help them move to their goals. It is also very important to know what they want in the future, but at this moment they need to put their energy and motivation into getting out of debt. One of the things they should be asking themselves each and every day is:

What can I do today to help me get out of debt?

Now this may take time and heartache for both you and the client, but believe me this will be one of the most liberating challenges and experiences of both your lives. Helping someone to have the opportunity to change their life is the best feeling you can ever have and that’s why I love coaching so much. So isn’t it time you helped your clients and also helped yourself to experience the best that life can offer?

Paul Cullingworth 
Tel: 01302 759838
01302 719000

D.Hyp (LCCH), BSCH (affil), Dip Life and Business Coaching (The Coaching Academy), Master Life coach
Fellow College of Cognitive Sciences

5 Responses to "Coaching Through Debt"

1 | Ginny

April 22nd, 2009 at 12:10 pm


Great blog and very relevant. My only query is how does the client pay for coaching when they are so in debt?

2 | Barbara Cobbold

April 23rd, 2009 at 10:13 am


Hi Paul,
What a great article demonstrating how versatile yet positive the coaching model really is. I like the practical steps you ask clients to take in writing down where they are at, what they want to achieve and really owning their issue right at the start, just as all coaching sessions need to do. My experience has shown that those who come to coaching with a true committment and are ready to work on their issues are very willing to write it down and face whatever they are dealing with. Those who come along and just want to talk about the reality and all the reasons why things dont work for them are not really committed to the change and often, in my experience, fall by the way side.
I am sure your committment to keeping out of debt yourself will be testament for all your clients as to the power of coaching!
Best wishes,

3 | Yvonne

April 23rd, 2009 at 12:29 pm


Wow thanks for sharing this. It felt like you were speaking to me and about me. However, the way you put it made it look so doable and has empowered me to face up to my situation right now and get to grips with my debts and finances. Thanks Paul. I really appreciate you writing in such an honest and realistic way. It feels like a load has been lifted off my shoulders. I feel so free and empowered to go and face the world and take on whatever life throws at me. Thank you so much.

4 | Alison Reeves

April 23rd, 2009 at 4:34 pm


What a great read! Thank you for sharing your experience and more notably, your tips in helping others to look at their debt. In 2005 and £30,000 in debt I nervously walked through court doors to declare personal bankruptcy.

Like yourself, the tools I’ve learned from coaching and personal development have, and continue to help me build and gain a liberated perspective on old patterns associated with my spending and debt. I too used the methods you described to help me to manage myself through a sticky time. What I found most challenging was choosing who I told, for fear of judgement and yes, people for their own reasons are very quick to judge, not wanting to understand. I soon came to see who were my true friends, loving me for who I am and not judging me for the mistakes I’d made.

Thank you again, as you’ve helped me to help others in coaching them through debt with some clear steps!

5 | Sue Hughes

April 28th, 2009 at 3:03 pm


Debtors can get the same non-judgemental advice free from the Citizens Advice Bureaux. Why should they pay for coaching?

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