Debt and Your Mental Health

Posted on 14 june 2016 by Paul Harb

There is no doubt that being in debt can negatively affect a person's mental health, and living with a mental health problem increases the chance of falling into debt. The mental health charity Mind commissioned the royal school of psychiatrists to carry out research in this area in december 2007 and january 2008. The analysis involved a survey of the experiences of debt among 1,804 people living with mental distress or using mental health services, as well as eight focus groups that were held across england and wales involving fifty six individuals with experience of debt and mental health issues. The analysis focused on their use of credit and loans over the preceding twelve months, and the impact of debt issues on health and quality of life. It also considered the respondents; experiences both good and bad; of contact with banks, lenders and creditors, and their perception of the support out there to those living with debt and mental health issues. The research revealed that a massive proportion of respondents were struggling financially and were finding it difficult to regularly meet payments. As a results, over 75% of respondents with problem debts had been threatened with legal or court action and over 50% had been contacted by bailiffs or debt collectors. 91% said that debt had worsened their mental health.

Debt and mental health are inter-connected; in other words one can cause the other. Which is why it is relevant that these findings are released. As the credit crisis unravels, more individuals are missing debt repayments as banks raise their costs and tighten their lending thanks to losses on a large scale, the question is how will the crisis unfold and how will you be affected?.

While it has become popular to blame the banks and other lenders, the choice to borrow in many cases is ours. The lenders are simply doing their job, they are in business to lend money. However that lending needs to be responsible and lenders need to be held accountable when it becomes irresponsible lending. i.e. lending to people who clearly cannot afford the repayments or selling additional products purely based on their profitability. Witness the rise in PPP claims and the findings against the banks regarding bank charges.

Debt and mental health are closely linked to both long term conditions and to poverty. In a climate of falling employment and cuts to public services individuals living with long term conditions and socio-economic deprivation are likely to be among those most acutely affected. While the vulnerabilities of this group must be recognised, and more protection given, this should not mean treating them as powerless victims. It is people's own capacity that holds the key to tackling health inequalities. At an individual level local services must support individuals to develop skills and the capability to achieve their potential, address health behaviours and manage long term conditions. At local and national levels, policy can only succeed if the voice of folks who live with long term mental health conditions and poverty are at the heart of the agenda. Support is growing for an integrated approach that recognises the complexities of individuals's lives and also the connection between health and poverty. Action to deal with poverty and health inequalities ought to include:building on proactive, anticipatory approaches developed through the keep well programme. Rolling out cost-effective models developed by organisations such as macmillan cancer support and Citizen's Advice Scotland to enhance access to social, financial and benefits advice for those with long term conditions. Working with employers and unions to tackle negative, discriminatory attitudes that regularly stop folks gaining, or maintaining, employment. How do we guarantee mental health checks are offered to everyone with a future condition? How should increased access to psychological and emotional support for patients be implemented? How do we tend to ensure that access to emotional support services is available at the point of diagnosis as a core service? There's a strong, well-evidenced link between long term conditions and mental health issues as well as depression, anxiety and suicide. As such individuals with long term conditions should be identified as a key group towards whom prevention and anticipatory care should be targeted.

Individuals with financial issues ought to obtain debt solutions and advice BEFORE their financial situation affects their mental health. This comes after the Nottingham Faculty of Economics (NSE) found that depression and mental illness can increase as people struggle with personal debt in post-recession Britain. Their analysis is based on figures that state that 13 % of those surveyed admitted to having debt problems and mental health concerns. This compares to simply 3% of folks without money issues who reported psychological problems. The Money Advice Liaison Group (MALG) notes that people with debt and mental health worries are more likely to treat their money situation as spiralling out of control, whilst some may not even be able to grasp the level of their personal debt.

Calls to parentline, a free 24 hour family support helpline, where the caller has diagnosed depression have increased by 41% since august 2010.Callers stated that their family finances the greatest worry, above that of their child's education, behaviour, health and wellbeing. When asked what one amendment they would want the government to make to boost family life, a third would ask for help with the family finances (topping the wish list of the respondents). There's wide body of proof proving the impact of debt on mental and emotional health, and investigating the resulting impact on family relationships, showing that debt can result in breakdown in a couples relationship,leading to divorce or separation, and will have an effect on a parent's relationship with their child, turning the loving nurturing parenting a kid needs to thrive into a stressed parent whose own mental health is suffering.

Non-profit advice organisations like CAB and CCCS as well as profit making debt management companies and other creditors need to be trained in correctly identifying stress indicators and helping avoid the longer term problems stress can bring to both the individual and their family rather than simply sticking a patch on the short term issues. Financial problems often start with a life changing event, separation or divorce, even weddings can have a negative effect on some people, a reduction in working hours, loss of job or the death of a loved one. Any one of these and other traumatic events can trigger mental issues and can lead to an inability to maintain regular payments to debts. This adds to the pressure and can lead to greater feelings of stress, a lack of self worth leading to depression.

If you have problems with your lender, then using one of the non profit debt counselling agencies also adds real weight; and if it ever got to court, then it is very helpful in proving you've been 'actively' trying to sort it out, which could prevent a court from issuing a repossession order on a secured loan or mortgage.