The 6 Health Effects of Debt

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One in four Canadian adults will have a mental health problem at some point in their life.

One in two Canadian adults with debts has a mental health problem.

One in four Canadians with a mental health problem is also in debt.

Debt can cause – and be caused by – mental health problems. It’s tempting to just not think about it – it can be uncomfortable and can make you feel guilty, depressed – or even hopeless. But sorting money problems out can help you to feel better – and to stay well.


  • Don’t ignore debt – it will only get worse.
  • Explain your problems to someone you trust.
  • Be sure to get expert independent advice.
  • Take control of your money and spending.

How do people get into debt?

If you are on benefits, or a low income, you may find that you just don’t have enough money to cover what you need to spend. When things are bad in the economy, you are more likely to lose a job or to have to make do with less benefit money.

There are some common things in life that can push you into debt – or make an existing debt worse.

  • Major life changes

You may lose your job, lose a loved one, break up with your partner, or there may be times when you have to borrow money, or stop paying bills, to cope with a new situation.

  • Staying unwell – or getting worse

Mental or physical illness can push someone into debt.  If you lose your job – or have to spend a long time off work – you won’t have so much money and you may actually have to spend more on paying for prescriptions, travel to health services or trying to find work.

  • Not getting paid

Your benefits may be changed, missed or even stopped. You may not be claiming all the benefits you can.

  • Living on a low income

If your income is below the average, you are more likely to get into debt in the first place. If you have to live on a low income for a long time, your debts can mount up because you have to replace essential items. Eventually, you may find that you just can’t get by without borrowing money,

  • Buying new things

Sometimes you just need to buy an essential – like a washing machine. Some types of problem – like mania – can mean that you have spending sprees and buy lots of stuff that you don’t need.

  • Ignoring the bills

If you are mentally unwell you may stop seeing people, find it hard to concentrate, find it hard to communicate or just find it too much to think about money and bills. You can easily get into debt from just ignoring paperwork and bills.

  • Pressure from outside agencies

A bank, or a loan company – or even a loan shark – can encourage you to take out another loan – perhaps even to pay off an existing debt – or to get a credit card. If your credit card limit increases, you may feel that it’s safe to spend more.

  • Creditor knowledge

You may feel that your creditors don’t understand the effect of your mental health on how able you are able to control your money.  For instance, if you have ‘manic spending sprees’, they may see these as simply fraudulent and not give you the help you need.


“I am dependent on Disability as a source of income. I was put into an impossible situation because a form was misplaced when I renewed the claim. It took over a year to sort out, during which time I was inexorably drawn into debt. It put an impossible strain on my life worrying about bills, whether I could replace anything if it broke, not being able to go out or to treat myself and not knowing whether the claim would be renewed or not. It was a constant worry, worry, worry that affected both my physical and mental health.”Edward


One person’s journey into debt

  • I missed some credit card payments and went overdrawn on my bank account …
  • I then had to pay a large one-off penalty fee for the overdraft and a high rate of interest which meant that I could not get out of overdraft ….. so I had to keep paying the high rate of interest …
  • I could then not afford to pay my gas, rent or electricity bills – I could not work out whether to pay them and ignore the bank or to pay the bank and go without heating and light …
  • I couldn’t work out what to do and found I was just getting upset by it – so I didn’t pay either the bank or the housing association or the power company .. .
  • I started to get red letters and threats of legal action …
  • I agreed to pay off the bank but the repayments they set were too high ….. so I still couldn’t pay them …
  • And after I hadn’t paid the rent for a couple of months, the bailiffs came and took my TV and some furniture and the Housing Association threatened to evict me …

This is one person’s story. Yours may well be different.


Being in debt can make you feel

  • That everything is out of control and there is nothing you, or anyone else, can do about it.
  • Hopeless, especially if your debt is getting worse.
  • Embarrassed to talk to anyone about your financial situation.
  • Guilty – that the problem is your fault, even though it’s been caused by your mental or physical health problems.
  • Depressed and anxious.
 “I felt that I was financially savvy. I had my savings accounts and no credit card. There was just one thing that put a spanner in the works – my mental health….For me mental health has equalled debt, poverty and social exclusion. Many people may not view living on benefits as debt, yet I feel indebted by this. I am currently unable to do my job, pay my own rent or be financially independent.”Donna

But how can I start sorting out my debt?

However much you owe – the sooner you begin to tackle it, the sooner you solve it.

First of all, tell someone you trust about it. This could be a friend, relative, colleague or someone from your mental health team. They can help you to feel less powerless and more hopeful – and can put you in touch with people who can help you out.


OK – so who can help?

Money advisers are experts in tackling debts and can give you both advice and support. You need an adviser who is free of charge, confidential and independent.


Before finding an adviser decide on what you want:

  • Advice only – some services will not take action for you, but instead will assess your needs and guide you through the things you need to do.
  • Advice and representation – some services will do the work for you,   including negotiation with any creditors.
  • Face-to-face advice – you may prefer to talk to someone in person. However, these services are popular and it can be difficult to get an appointment.
  • Telephone advice – this may suit you if you have mobility problems, caring responsibilities, live in a rural area or find it difficult to leave your home and meet people in person. Some of these advice centres have specific times when they deal with calls, others specialise in telephone advice.
  • Internet advice – some services offer online, interactive and individual advice.

Making contact

Some advice services are very busy. Getting through by phone may take you a few tries. If you decide to visit without making an appointment, you may need to queue on a first-come-first-served basis. This can be pretty stressful in itself and not all services offer this type of drop-in session every day. If you check in advance, you can save yourself a lot of stress and inconvenience. You can take a look at a recommended service here.


Finding a money adviser

Sources of free and independent advice are listed at the end of the leaflet. You can also search for local services on some organisations’ websites, or phone their general enquiries line.

A money advisor will:

  • interview you to find out what the problems are and help you to sort out which are the most important ones;
  • help you draw up a budget – they can advise you on ways to increase your income and reduce your expenditure;
  • advise you on how to deal with the debt, including bankruptcy, negotiating with creditors and any arrangements you have made yourself;
  • advise you on other sources of help or options.

They may also be able to:

  • help you to negotiate with creditors;
  • help with form filling (e.g. claiming social security benefit);
  • represent you at court hearings for debt.

Working with an adviser

Money advisers are not mental health experts. However, most agencies should have at least one adviser who has had some training in working with people with mental health problems. You can find out if an agency has someone like this and ask for an appointment with them.


Decide what you want (and don’t want) to tell the money adviser about your mental health problem.

Getting support

If you feel uncomfortable about going alone to see a money adviser, ask a friend, relative or someone from your mental health care team to come with you. You may only need them to come with you for the first session, but don’t be afraid of asking for them to come again if you feel you need it.

Before advice sessions

Before you visit, or phone, an advice centre or money adviser, you need to:

  • gather together all the paperwork or bills;
  • think about how your mental health affects how you manage your finances and repay your debt.

Debt and your mental health

When trying to recover a debt, creditors may be entirely unaware of your mental health problem. They can act in inappropriate, and sometimes distressing ways. You will need to decide if you want to tell your creditors about your mental health difficulties. If you do, then your money adviser also needs to aware of your mental health difficulties.


  1. Looking for some info and loans to pay off bills

  2. Miriam Berman July 9, 2014, 5:53 am

    Have you checked out our site pages? There is some good information there & you can easily apply for a loan online. Let me know if you need anymore help, Miriam :)

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