The Money Advice Service recently stated that they believe some 9 million people are suffering mental health problems, typically anxiety, stress and depression due to money problems and debt.

Certainly my time spent as a debt advisor has given me plenty of anecdotal evidence that debt, stress and anxiety are intrinsically linked.  They are two sides of the same coin.

Debt can leave the debtor feeling as though there is no where to turn.   The debt problem can be all consuming leaving the debtor feeling isolated and without control.  Ironically, this often means that the debt problem is ignored as the debtor, quite understandably, does not wish to confront the problem and typically places his head firmly in the sand.

Often it can be seen that there is a vicious circle which the debtor finds unable to break out of.  There is debt which leads the person to be depressed.  The depression means the chances of the debtor dealing with the problem are less due to low mood and often clinical depression.  This in turn exacerbates the problem and increases the debts and the spiral continues.

Consequently the most important and difficult step to take is for the debtor to reach out to get help.  This can be extremely difficult as this often the first time that the debtor has acknowledged his problems to anyone.  Often close family members and friends are not aware of the debtor’s problems.

Quite often at this stage, by telephone or in person, I have seen people break down due to the stress of explaining their insolvent position.  However, that emotional overflow quickly turns into one of hope and relief when I explain the options and they start to see that there is a way out.

What can be done?

There are a few simple steps that someone in debt can take to improve their financial position:

1.    Acknowledge and identify the problem.  

Often people struggle for months and years trying to juggle credit and scrape by.  If it comes to a time whereby for example, a debtor is using credit to pay for essential living expenses such as food or mortgage or rent payments, then this is a clear indication that help is required.

2.    Get organised

Sit down and make a list of all debts and make a detailed examination of your income/expenditure.  This will tell you if there is any surplus money available to be offered to creditors.

3.    Get good, free debt advice

The first rule here is never pay for debt advice.  There is plenty of reputable free advice in the marketplace which will give you your best options.  There are solutions for debt problems but this will depend on the debtors’ personal circumstances.  Bankruptcy, Individual Voluntary Arrangements (IVAs) or Debt Management Plans (DMP) are some of the options.  It is important to seek professional advice as to the best way forward.  I personally offer free impartial advice in relation to any debt problems.  There is also free advice available from reputable charities such as the Citizen’s Advice Bureau.  Local Insolvency Practitioners as well as IVA companies will also give free impartial advice as to the best way forward.

4.    Make sure action is followed through

Once the problem has been identified and a course of action advised upon, it is important for the debtor to see things though. The problems will still remain and won’t go away until the necessary medicine has been taken.  Whether this is in the form of a Bankruptcy Petition, an IVA or another solution will depend entirely upon the debtor’s own financial position.

Finally, it should be noted that the Money Worries tool (from the Money Advice Service and NHS) can help you if financial problems are causing you stress and depression.

If you would like to speak to one of our bankruptcy solicitors about your financial position, we can offer initial advice free of charge. Contact us for more information.