The effects of debt on mental health

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The effects of debt on mental healthBeing in debt can be a very stressful time and figures show that people struggling to meet the cost of their monthly commitments are twice as likely to have mental health issues. A study conducted by the University of Nottingham found that the stress and anxiety caused by financial problems often spills into people’s personal lives, affecting their ability to work and maintain relationships.

However, paradoxically, in some parts of the UK where repossessions and bankruptcy were more common, the number of people diagnosed with mental health issues was found to be relatively low. Dr John Gatherwood, who led the research, said this suggests that the stigma of debt problems is reduced in these regions and getting behind with repayments is accepted as a ‘social norm’.

The main part of the study was conducted by asking people a series of 12 questions requesting them to describe their mood as well as their current financial situation. They were also asked to give details on sleeping patterns, ability to concentrate and their confidence. Those struggling with unsecured debts were found were more likely have anxiety, while one in five people in mortgage arrears were revealed to have some form of depression as well as intense anxiety.

The research builds on a report from the Royal College of Psychiatrists which also found that around 50 per cent of people with debts have a problem with mental health.

You must take action

People get into debt problems for all kinds of reasons and it is important that they keep a sense of perspective in relation to it and not be overly critical of themselves. The worst thing that anyone struggling with bills can do is ignore them. This only leads to debt levels increasing and the problem getting worse. Burying your head in the proverbial sand may seem to take the pressure off initially but the long-term impact can be devastating.

If debt problems are impacting on your life and health, then it is imperative that you speak about the issue with someone you trust. Both debt and mental health problems do not just go away and it is often a good move to get some independent advice about your situation. Put simply, the sooner you look to tackle the issue, the sooner it will be solved and you will be finally debt free. Yes, at this time you may feel powerless, but there are number of companies and charities out there that can give you support and put you on the right track to financial freedom.

Solutions to consider

Bankruptcy is a word which carries a significant stigma and many people fear taking debt tackling measures for that very reason, but the B word isn’t the only option available. If you one over £10,000 to two or more lenders then you could be able to apply for an Individual Voluntary Arrangement (IVA). The company handling your case will negotiate a lower monthly repayment with your creditors and after five years you will be debt free. This method will affect your credit rating, but it’s less severe than bankruptcy and can see up to 75 per cent of your commitments written off.

If you have a low income and debts of less than £15,000, you could apply for a debt relief order (DRO). These work in much the same way as an IVA but are designed for smaller debt levels and typically run over one year. Even if you do not feel ready to go down a formal route at this stage, it is good to talk. Bottling up your emotions will have a detrimental impact on your overall health so seek out the sympathetic ear of a friend, family member or professional debt advisor.

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