Debt and mental health: getting help and extra protection

Debt and mental health are closely linked

Research by the Money and Mental Health Policy Institute has found that people with mental health problems are around three and a half times more likely to be in problem debt. And debt problems can make mental health worse. Among StepChange clients who had faced bailiff action, 95% said it had a negative effect on their mental health (in a small survey). You’re not alone, and there is help.

The protections available

Telling creditors

Creditors regulated by the FCA must treat customers in vulnerable circumstances fairly. When you tell them about your mental health, they may:

• pause collection activity for a period
• agree reduced payments or freeze interest
• communicate in a way that suits you, such as in writing only
• in some cases, write off the debt

The Debt and Mental Health Evidence Form (DMHEF)

The DMHEF is a standard form that a health or social care professional can fill in to tell creditors how your mental health affects your ability to manage money. A debt adviser can help you use it. It’s designed to be accepted by creditors across the UK.

Mental health crisis Breathing Space

If you’re receiving mental health crisis treatment, a debt adviser can apply for mental health crisis Breathing Space with evidence from an Approved Mental Health Professional. It protects you from most creditor action, including bailiffs, for as long as your treatment lasts plus 30 days, and there’s no limit on how many times you can have it. Read our Breathing Space guide.

Bailiffs

Bailiffs can’t enter your home if the only people there are vulnerable, and enforcement firms are expected to identify vulnerability and adapt. Many councils will take a debt back from bailiffs. Read bailiffs and vulnerable people.

Practical steps

1. Tell someone you trust and consider asking them to help with letters and calls. You can give a trusted person or adviser authority to speak for you.
2. Get free debt advice. Advisers are trained to support people with mental health problems. See free debt advice.
3. Tell your creditors about your situation, using the DMHEF if you can.
4. Focus on priority bills first. Read priority debts.
5. Look at a longer-term solution once you’re ready, such as a DRO or an IVA.

Read our extra support page for how we and our partner can help.

Frequently asked questions

Can debt be written off because of mental illness?

Sometimes. Creditors can write off debts where someone has a serious long-term condition and no realistic prospect of paying. Ask the creditor and provide medical evidence, ideally with a debt adviser’s help.

Do I have to tell creditors about my mental health?

No, it’s your choice. But telling them can lead to more support and fairer treatment.

Can I get Breathing Space for anxiety or depression?

Mental health crisis Breathing Space is for people receiving crisis treatment. If that doesn’t apply, a standard 60-day Breathing Space may still be available through a debt adviser.

Sources

• Money and Mental Health Policy Institute
• Money Advice Trust, Debt and Mental Health Evidence Form
• The Debt Respite Scheme Regulations 2020
• FCA, Guidance on the fair treatment of vulnerable customers (FG21/1)