Even a “mild” problem with depression, anxiety or other mental health issues can make it harder to manage debts – reading letters, taking decisions, managing deadlines and dealing with creditors may feel like impossible tasks.
This isn’t just credit card and loan debt. In August 2016 Citizens Advice research found that people with poor mental health were more than twice as likely to be behind with bills such as council tax and utilities.
Financial problems can also be worse for people with mental health problems who may find it hard to carry on with their job or to navigate the benefits maze. And people with problems such as depression and panic attacks earn up to 42% less, prompting the government’s equalities watchdog in 2016 to brand the pay gap “a disgrace”.
The Money and Mental Health Policy Institute produced a great report in June 2016 called Money on Your Mind, explaining the links between mental health problems and debt. I’m hoping they can go on to find some practical ways in the future to cut or reduce the impact of these links. But if you have a debt problem right now, what can you do?
Am I actually depressed?
You may be feeling helpless, fed-up or even desperate about your debts but not be suffering from depression. Then the answer is usually to take some action so you get back in control: read up about the possible debt solutions and start taking steps yourself – stop using your credit cards is the vital first one.
But suffering from depression and having debts is a more difficult situation and that is what this page is looking at.
A typical aspect of depression is that you think nothing can help you: “I thought I was just being weak and needed to get a grip on things” and “With hindsight I can see that I had been stopping doing many things gradually over about a year, but at the time it just seemed normal and not like an illness that a doctor could help with” are common comments.
The NHS says, “There are many symptoms of depression, including low mood, feelings of hopelessness, low self-esteem, lethargy and sleep problems. The more symptoms someone has, the more likely they are to be depressed.” If you haven’t talked to your doctor already about this, there is a self-assessment test here that may help you decide if you are depressed.
Getting help with depression and other mental health issues
- If you think you might be depressed or have other mental problems, talk to your doctor. There are alternatives to antidepressants if you don’t want to take medication.
- The charity MIND has a useful website, help line and local groups.
- The charity Rethink Mental Illness has a website with a lot of information and an advice line.
- In a crisis with thoughts of suicide or self harm, call The Samaritans on 08457 90 90 90 any time of the day or night or go to your local A&E.
Getting help with your debts
Many people with mental health problems will need support from debt advisors to help with their debts. Often the top priority is to get consumer debt problems (loans, credit cards etc) placed “on hold” whilst more urgent problems – health, benefits income, housing, priority debts etc – are tackled. There is a list of good places to contact here.
Making the first phone call is so hard, but most people do find it a huge relief to share their problem.
Creditors will take note if you have mental health issues
You may think creditors and debt collectors won’t care that you have mental health problems, after all you borrowed the money and they want you to repay it.
There is good news here – the FCA, the regulator for lenders and debt collectors, says they should “treat vulnerable customers fairly“. People with mental health problems are “vulnerable” because those problems make it much harder to manage debt issues. This isn’t just a line in some long, unread document – the FCA is making this a priority, see this announcement.
Most banks, building societies and credit card providers subscribe to The Standards of Lending Practice, which has a section of identifying and handling vulnerable customers.
The Credit Services Association is the trade body for debt collectors. Its code of practice says firms should “consider refraining from commencing, or consider suspending or ceasing, any legal or bankruptcy action upon identifying that the customer is particularly vulnerable and that such action would be likely to exacerbate a physical or mental health condition.”
What to tell your creditors
You may not want to discuss what feel like very personal problems with strangers, especially one who may have phoned you to get you to pay money that you can’t afford. You may feel that if you tell your creditors more about your situation they will push you even harder. But all creditors and debt collectors have procedures and policies for when customers have mental health issues and they can’t use these unless you tell them about your problems. Also if you don’t tell them about your situation then they may decide you are a “won’t pay” rather than “can’t pay”.
You may prefer to write to your creditors or email rather than talk over the phone. It can feel less pressurised, it lets you state your full situation clearly and gives you a record of what you said. If you don’t feel you can write these letters, then contact one of the recommended debt advisors to help (see above).
These situations are very individual, but think if any of the following could be included in your letter:
- I have had a mental health problem for the last x months/years;
- my doctor has diagnosed xxxxxxx
- I have been referred to xxxxxxx hospital/clinic/therapist [copy of any letter attached];
- I have been prescribed xxxxxxxx and attach a copy of the prescription;
- I have been an in-patient at xxxxx hospital / I was sectioned [from dates];
- I am under the care of [ xxxxxx mental health team / mental health social worker];
- my income has fallen because I am unable to work / am on sick pay / I am living only on benefits;
- I am finding it hard to manage financially and am unable to make the normal repayments to my debts at present;
- I also have rent or mortgage arrears / council tax arrears / other priority debts;
- please accept a token payment of £1 a month/ I cannot make any payments to this debt at present;
- because of my vulnerable state, please suspend any collection or legal activity on this account until my situation improves and freeze any interest or charges;
- I find it difficult to cope with phone calls and would like all communications to be by letter.
If you can make more than token payments to your debts, then it would probably be a good idea to look at a debt management plan. If you find it difficult to deal with creditors contact StepChange about this. StepChange are a major UK debt charity, you can talk to them in confidence and you will find them a friendly voice so you can tell them about your problems.
What will your creditors do?
They may agree to suspend collection activity for, say, six months after which they will review it. They may ask you to complete their Income / Expenditure form or ask you to supply one – if this seems difficult, contact a debt advisor (see above). They may ask for a letter from your doctor or a Debt and Mental Health Evidence Form.
If you don’t think your creditors are responding properly to your situation, you could ask the Financial Ombudsman to look at this. “I borrowed 20k in two weeks” – a bipolar spending spree looks at how a reader did this. Yoyur local Citizens Advice will be able to help with these complaints if you don’t think you can manage.
Other options in the longer-term
Putting a hold on creditor action and interest may not be enough for a long-term debt problem – it may be necessary to look at options such as a debt relief order (DRO). Or sometimes creditors may be prepared to consider writing off a debt.