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How relevant is mental health when it comes to debt?

19 November 2018 - Posted by TalkAboutDebt

A new report produced by the Money and Mental Health Institute has shown that 4 out of 10 people failed to disclose to their debt advisers, when seeking advice, that they were experiencing mental health problems.

The reason for this, the report found, is people with mental health problems:

  • Did not believe it would make a difference (65%);
  • Feared what would happen to the information if they provided it (28%), and
  • Worried they would be treated less favorably (23%).

In the last few years, the relationship between debt and mental health has become more widely known, precisely because of the work of debt and mental health charities, like the Money and Mental Health Institute.

It is now known, for example, people with mental health problems are three times more likely to be struggling with debt than those who don’t experience problems.

It is also widely recognised that problem debts are often the source of mental health problems, such as depression and anxiety.

The new report also found that of the nearly 1,600 debt advisers that were surveyed, 73 percent spoke with at least one client in the previous year who had disclosed suicidal thoughts and more than half believed they had spoken with someone who was at serious risk of taking their own lives.

Mentioning to your debt advisers that you are experiencing problems with your mental health, therefore, is important.

Does information about your mental health make a difference?

Although not mental health professionals, debt advisers are usually experienced in dealing with clients struggling with mental health problems. They can often provide advice and information that can help alleviate any anxiety they may be experiencing and can send “breathing space” letters to creditors that can do just that: provide them with breathing space whilst they address their financial difficulties.

They can also make referrals to other local support services that can help them with their mental health problems.

Lenders also have increased responsibilities in how they treat customers when they are notified that they are struggling with mental health problems. The Financial Conduct Authority, for example, now requires consumer creditors to treat their customers fairly, which means they must acknowledge when notified, that their customers are experiencing mental health problems and reflect this in how they treat them.

It doesn’t mean people don’t need to repay their debts, but it can make a difference in how they do that and in certain circumstances may allow for debts to be written off.

What happens to information about your mental health?                 

When service users do notify their debt advisers that they are experiencing problems with their mental health, it is completely understandable they may be worried about what will happen to their information. It is not unusual for people to be embarrassed and for them to be anxious that others will find out.

However, all debt advice providers must follow strict rules when it comes to how they use the information that their clients provide them, especially if that information is “sensitive information”. They cannot just disclose it to other parties, such as creditors, without first obtaining what is known as “express consent”.

Express consent is a legal term which means when any sensitive information is provided to a debt adviser by a client, such as information about their mental health, that information is afforded a greater level of protection than just general information about the client.

The advice provider, therefore, has to obtain express consent from their client, in writing, if they want to inform their creditors that their client is experiencing mental health problems.  They also have to tell their client why they would want to do so.

Clients can refuse, and if they do, they should not have to worry they won’t receive a service, as refusing express consent should never lead to a service not being provided.

However, if creditors are aware that someone is experiencing mental health problems, then this allows them to meet their obligations to “treat customers fairly”.

Will you be treated less sensitively?

Consumers who are struggling with mental health problems should also never worry when seeking debt advice that they will be treated less sensitively if it is known they are experiencing mental health problems.

As illustrated above and in the report by the Money and Mental Health Institute, the link between debt and mental health is extremely well known about. Debt advisers also are no strangers to the issue and alert to the problems it can create for clients.

If advisers are aware of the issue they can then tailor the service to the client’s needs where possible. This may mean allowing for a face to face meeting or for interviews to be carried out by telephone. It can mean allowing the client more time before they make a final decision on what is the best course of action for them. It can also mean helping the client identify if there are additional support or benefits available that they could access that would improve their ability to deal with their financial difficulties going forward.

The problem for advisers is if they don’t know, they cannot tailor their services to meet the client’s needs and this often leads to clients disengaging from using the service and not getting the relief from their debts that they need.

It is, therefore, important to seek advice about financial difficulties and to bring to the attention of your adviser that you are having problems if this is the case.

If you need help with problem debts and want to speak with an adviser that is experienced, respectful of your right to privacy and will ensure you get the time to make the correct decision for you, then contact Talk about Debt on 0808 156 7730

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