By Mark Fairlie

Debtors going through a mental health crisis should be allowed ‘breathing space’ to get back on their feet, money and mental health charities are saying. The idea comes as the Money and Mental Health Policy Institute (MMHPI) found that 23,000 people were pursued by debt collectors whilst in the hospital for mental health issues in 2017.

The potential scheme is being put forward by a collection of debt-related charities and groups, with the aim of reducing the number of ‘crisis debt’ situations people with acute mental health problems find themselves falling into.

Suicide is considered by almost 50% of people struggling with debt in the UK, according to the Debt Support Trust. As mental health sufferers are chased by creditors, the stress they experience exacerbates existing problems, which may lead to an increased risk of suicide. Often, mental health sufferers in this situation are unable to reach out for help or notify their credit companies of the situation, as there is no guarantee that they’ll be awarded leniency.

The government has started considering a set of new rules known as “breathing space” in order to address this issue. The proposed section of the Financial Guidance and Claims Bill would mean creditors must implement a ‘grace period’ for mental health sufferers experiencing a debt crisis – this period of time would include the mandatory freezing of accrued interest and would allow the customer to get back on their feet.

Mental health and debt

Research by the MMHPI shows that mental health problems affect how people behave when faced with financial difficulties.

Some avoid opening bills or bank statements in order to stave off further anxiety, and others – like Lee Brookes, a 41-year-old IT manager with bipolar disorder – will spend compulsively as a coping mechanism.

Mr Brookes told the BBC that as a sufferer of acute bipolar disorder, he would spend large sums of money during manic episodes. At the time, he earned a “high five-figure” salary as the owner of an IT company, but after selling his business and becoming an employee, he found his binges became unsustainable.

In 2014, he declared himself bankrupt, which only worsened his condition. His debts amounted to £30,000, which he said prompted an “inevitable fall”, which caused a “spiral of destructive thinking.” Mr Brookes found himself terrified of losing his job, house, family, and friends, describing how difficult facing up to the debt became as time went on.

Bipolar disorder affects an estimated 2% of the population (Bipolar UK figures), and is described by Suzanna Hudson, Chief Executive of Bipolar UK, as a “severe, life-long mental illness.” It comes forth in the list of most predominant mental health problems worldwide, preceded by depression, anxiety, and schizophrenia, according to Mental Health UK.

In the UK in 2016, 19.7% of people aged 16 or older showed symptoms of anxiety and depression. However, many sufferers do not receive the help they need to manage their condition, and when financial difficulties occur, they can spiral into debt extremely quickly.

What can be done?

Debtors suffering mental health problems should be allowed 'breathing space'

The ‘breathing space’ proposal would give mental health sufferers respite from bailiffs and persistent debt collectors, meaning they would be able to seek help and advice in order to better manage their mental health problems.

It would apply to those who show willing to receive help, whether through therapy, medication, or other methods prescribed by a medical mental health professional.

Martin Lewis, the founder of the MMHPI, said the simplest way to implement the ‘breathing space’ scheme would be to assume that “all in serious mental health crisis are likely to be struggling with their cash.” His charity conducted research which found many examples of people losing their jobs due to mental illness, resulting in thousands of pounds in accrued fees and bills.

As reported by the BBC, a recent study has shown that in the case of depression, modern anti-depressants have been proven to work effectively in minimising and reducing symptoms. Although medication may not always be the first form of treatment for everyone, for those debtors whose doctors prescribe them anti-depressants, a relatively quick turnaround may be observed, allowing the patient to recover and re-engage with financial management.

The proposal states that mental health sufferers who inform their health and social care staff of increased inability to manage debt should be referred to the “breathing space” scheme, which would then refer them to specialist money advice once they had recovered sufficiently.

What does this mean for creditors?

A spokesperson for UK Finance, the banking trade body, said that lenders want to assist struggling customers, “including those with mental health issues.”

They agreed that “lenders should give customers a ‘breathing space’ to get advice while taking individual circumstances into account to agree the most appropriate course of action.”

Mr Lewis of MMHPI mentioned that lenders often behaved sympathetically towards debtors struggling with mental illness but said that he believed making the breathing space scheme mandatory would “give all parties clarity.”

This would certainly assist those mental health sufferers whose anxiety prevents them from calling their credit companies, as they are unaware of guaranteed assistance, or unable to get in touch at all.