Even a “mild” problem with depression, anxiety or other mental health issues can make it harder to manage your money. Reading letters, taking decisions, paying by a deadline and talking to creditors may feel like impossible tasks.
Recent research has found that one in five people with mental health problems are in problem debt – that’s more than three times the rate as people without mental health problems (5%). And half the people in problem debt also have a mental health problem.
It’s no wonder debt and mental health are called a “toxic combination”.
This isn’t just credit card and loan debt. People with poor mental health are also much more likely to be behind with essential bills.
The Money and Mental Health Policy Institute produced a great report called Money on Your Mind, explaining the links between mental health problems and debt. And they are looking at practical ways 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 often the vital first one.
But suffering from depression and also 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 A couple of common comments are:
- 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“.
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 mood self-assessment test here that may help you decide if you should see your GP.
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 page of resources to get support.
- 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 money problems and 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.
The good news is the FCA, who regulates lenders and debt collectors, says they should treat vulnerable customers fairly. The FCA sees this as a priority. People with mental health problems are vulnerable because those problems make it much harder to manage debt issues.
Most banks, building societies and credit card providers subscribe to The Standards of Lending Practice, which has a section on 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 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. 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 not want to talk over the phone. Using emails or letters can feel less pressurised. It lets you state your full situation clearly and gives you a record of what you said.
These situations are very individual, but think if any of the following apply to you:
- 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 and can’t make the normal repayments to my debts;
- 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;
- Phone calls make me anxious and I and would like all communications to be by email.
If you don’t feel you can write these letters, contact one of the recommended debt advisors to help (see above).
If you can make more than token payments to your debts, then a debt management plan may be a good option for you. Talk to StepChange about this. You can talk to them in confidence and you will find them a friendly voice so you can tell them about your problems. Then they can talk to all your creditors – so making that one call to StepChange can take a load off you.
What will your creditors do?
They may agree to suspend collection activity for a time after which they will review it. They may ask you to complete an Income / Expenditure form. If this seems too difficult, contact a debt advisor. 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. Your local Citizens Advice will be able to help with these complaints.
Other options in the longer-term
Stopping interest or putting a hold on a debt 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. National Debtline has a good factsheet that looks at a lot of these options.