Debtors Anonymous
Debtors Anonymous (DA) is a twelve-step recovery program designed to assist individuals struggling with unmanageable, unsecured debt. Established in April 1976 by a group of recovering alcoholics in New York City, DA emerged from a desire to address self-destructive financial behaviors. The program encourages members to avoid accumulating new debts while working to resolve existing ones through negotiations and repayments when possible. Members often track their spending and are supported by sponsors and small groups to develop effective financial plans.
DA promotes awareness of financial management and provides a supportive community for those seeking to change their relationship with money. While the organization has grown to offer approximately five hundred meetings across multiple countries, its focus has evolved over time, particularly as the landscape of debt and financial challenges has shifted. DA’s approach recognizes that various factors can contribute to debt accumulation, including compulsive spending behaviors. The program emphasizes budgeting and responsible spending, distinguishing itself from predatory credit services and offering an alternative for those overwhelmed by debt.
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Subject Terms
Debtors Anonymous
DEFINITION: Debtors Anonymous is a twelve-step recovery program modeled on Alcoholics Anonymous, which helps people overcome the accumulation of unmanageable, unsecured debt.
ESTABLISHED: April 1976
Background
Debtors Anonymous (DA) owes its inception to a group of recovering alcoholics in New York City who, in 1968, organized an informal support group under the leadership of John H. to explore members’ self-destructive behavior with money. After trying various approaches (at one time, the group called itself Penny Pinchers and emphasized thrift, and it later called itself Capital Builders, emphasizing savings and income maximization), group members concluded that the central problem was accumulating unmanageable, unsecured debt.
In April 1976, the group formally inaugurated DA, a program based on the twelve-step recovery model of Alcoholics Anonymous (AA). DA's early, central aim was to help its members avoid accumulating additional unsecured debt and clearing up past debts through negotiations with creditors and repayment when feasible.
The organization grew slowly. By 1982, five meetings were being held, all in Manhattan. At this time, the founders established a board of trustees and a general service conference. DA now provides about five hundred registered meetings in fifteen countries, but it remains concentrated in urban areas in the United States (US).
The organization has published the book A Currency of Hope (1999), a compendium of thirty-eight stories about recovery from debt through DA participation, and several pamphlets, mainly on the mechanics of working the program. Members are referred to AA literature for general information on twelve-step programs, to which DA publications are considered supplemental.
Most of DA’s growth occurred before 1996. Several explanations have been offered concerning why interest in DA has leveled off or even declined since the mid-1990s. One possibility is that it treats the act of incurring debt as if it were an addiction, a model that remains questionable. Indebtedness often accompanies addictive behaviors, as prudent financial management is overcome by compulsion; the act of borrowing itself is secondary. As long as the bulk of DA membership was drawn from the ranks of alcoholics, who were accustomed to using the twelve-step model to combat a “real” addiction, people would accept the type of program (like DA) that demanded total abstinence and strenuous efforts to clear up old debts, because it had worked for them. An increase in the number of people without twelve-step experience who expected general financial management support and rejected abstinence in favor of moderation has shifted DA’s focus. That shift introduced terms such as self-debting, financial anorexia, and situational debting. There is a movement within DA to return to a stricter concentration on monetary debt. An additional issue with the DA model is the implication that all debt is harmful when some debt, such as home mortgages or car loans, is a necessary part of a healthy financial outlook.
Mission and Goals
The aim of DA is twofold. First, it provides recovery tools for people struggling with debt, and second, it provides a support structure within which recovering members can share their experiences with newcomers.
A vital feature of the program is awareness of individual finances and the climate in which people operate. Members are encouraged to keep a daily journal to note every expenditure and keep receipts. Although the organization does not lobby publicly against the often deceptive practices of the credit industry (one of DA’s traditions, borrowed from AA, is avoiding politics), it does play an active role in educating members about how the industry encourages people to incur debt.
A person wishing to receive help from DA should first start attending meetings or, if they are not available, should explore meetings online or by telephone. Upon joining, a debtor will connect with a sponsor, a more experienced member who guides them through the twelve steps. The new member will then be asked to join a pressure relief group comprising three people who have gone a minimum of ninety days without accumulating unsecured debt. The new member will work with other group members to formulate a spending and action plan. Ideally, a spending plan allocates funds to meet needs, retire debt, and save for the future, and it also includes ways to increase income.
People become financially indebted for many reasons, not all of which are under personal control. One pattern of behavior that has addictive characteristics and can lead to spiraling credit card debt is compulsive spending disorder. The Diagnostic and Statistical Manual of Mental Disorders of the American Psychiatric Association (APA) includes compulsive spending under the diagnostic category of impulse control disorders not specified. The APA may recognize the disorder as distinct in revised manuals. DA addresses spending compulsion indirectly through a strict budgeting program and prohibits credit card use for consumer purchases.
Since the collapse of the housing market in the US and the ensuing global recession beginning in 2007/2008, the availability of consumer credit has contracted considerably, and the realities of debt in the US have changed. Overconsumption and lack of impulse control play a smaller role now, while declining income, declining home values, medical debt, and student loans have become more prominent. This shift may be another reason why fewer people are using the services of DA. In the mid-2020s, the lingering economic effects of the COVID-19 pandemic and high inflation rates made incurring small debt a necessity for many Americans who could feel stigmatized by DA. Still, the services offered by DA are preferable to credit and debt consolidation companies, which are often predatory or fraudulent.
DA considers legal bankruptcy proceedings an outside issue and has no position for or against it. Declaring bankruptcy would force a debtor into the sort of careful budgeting and economizing DA encourages. It is often the only realistic option for people with large involuntary, primarily medical, debts.
Bibliography
Bill W. Alcoholics Anonymous. 4th ed., New York: Alcoholics Anonymous, 2002.
Debtors Anonymous. A Currency of Hope. Needham, MA: Author, 1999.
Debtors Anonymous - Meetings, Support, Groups and Programs, 30 May 2024, debtorsanonymous.org. Accessed 23 Aug. 2024.
Geisst, Charles R. Collateral Damaged: The Marketing of Consumer Debt to America. New York: Bloomberg, 2009.
"History of Debtors Anonymous." Debtors Anonymous, 11 Oct. 2018, debtorsanonymous.org/about-da/history/. Accessed 23 August 2024.
Manning, Robert D. Credit Card Nation: The Consequences of America’s Addiction to Credit. New York: Basic, 2003.
Morenberg, Adam D. "Governing Wayward Consumers: Self-Change and Recovery in Debtors Anonymous." MA thesis. UP of South Florida, 2004.