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How Debt Affects Your Mental And Physical Health


Of all the stresses we endure in modern life – including concerns over your physical health and the health of your loved ones, job security, paying your rent – almost every one of us is thinking about our finances pretty much, all the time. And if we have debt problems, even just carrying credit card debt, those stresses can grow tenfold.

Then there are those of us, already experiencing a mental health issue, who find life so challenging on a daily basis and suffer financial difficulties. Your past-due bills just act as the icing on an already unappetizing cake.

It’s no wonder debt affects our mental health and vice versa. According to a double-opt-in survey of 2,000 Americans commissioned by National Debt Relief and conducted by OnePoll, being in debt not only increased their anxiety but also affected their retirement plans and marital status. 

What Are The Effects Of Debt On Mental Health?

From coming between your relationships to causing us to withdraw from life, debt affects your mental health in so many ways. Beyond the obvious damage it can have on your financial health, daily stresses over debt spread like tendrils across your mental stability, weeding their way into all that we are and do. Not to mention how outstanding debt can appear and affect your credit report and ruin future purchase plans for years.

The problem with being in massive debt is that once you start down the slippery slope of not making payments on time, or even at all, debt avoidance becomes a way of life. This can affect your overall well-being, as reported by a National Debt Relief survey that discovered people on average lose over 200 hours of sleep per year over their debts. 

Have you experienced this?

  • Charging up the balance on one credit card to pay another
  • Screening every phone call because of fear it might be a creditor

But it’s a way of life that not only keeps you drowning under debt but can also lead to divorce or even putting off marriage. 

Even when you are not thinking about the money you owe, avoiding that pile of bills on the counter or trying to engage in any distraction to take you away from your money woes, debt worry continuously runs on low idle at the back of your brain. 

According to the poll results, 69% of respondents said they withdraw from things they love due to long-term exposure to a negative stimulus like constant stress, anxiety, and moodiness that can all too easily lead to mental health problems. 

The longer you carry any kind of debt,the worse your mental health can be. Some scenarios include you are in your 30’s still working off a student loan, you and your family have just bought a new home and now have a 30-year mortgage payment, your oldest child just started college and tuition needs to be paid. All these situations add to your stress, too. 

Or maybe you live with the inevitable fear of your personal debt growing way beyond your ability to pay it off. Reports say that all one person needs is to become sick for the amount of a medical bill to keep them in debt for a lifetime. This unexpected debt can quickly snowball and keep you from going on vacations, date nights or even attending the wedding of a loved one.    

The debt you are in can create a cycle of hopelessness that could all too easily wreak havoc on your state of mind. And what if you already have some mental health issues? Incurring debt will only exacerbate your condition, which will make it all the more challenging for you to get out from under your past due bills. You could find yourself in a vicious cycle that’s hard to break; trying to lift yourself from worry and a sense of hopelessness long enough to tackle the debt that’s before you by finding a debt relief plan. 

Can You Get Debt Written Off Due To Mental Issues?

Whether or not your lender/creditor or their collection agency will completely forgive your debt comes down to a few factors. 

  • How much you owe
  • How long you have owed it
  • The severity of your mental health issue
  • How debilitating the situation  is to you
  • Your current employment status

The lesser the amount you owe, the more likely it might be that a creditor will not want to spend so much time chasing you for the amount you owe or expend the effort to shoot your debt down the line to a collection agency. You might very well be able to call your creditor and plead your case. If the amount you owe is small enough (especially if you already made some payments towards it), you could get it expunged.

Waiting out the debt

The amount of time you have owed the money also factors into how possible it might be that your creditor, especially a collection agency, might forgive the debt. It’s common knowledge in debt collection that the longer a debt goes unpaid, the harder it is to collect. “Waiting out the debt,” as it is called, is a dangerous game to play.  Depending on how much you owe and the policy of a collection agency or your creditor, your debt could get reported to a credit bureau after some time.

Creditors and collection agencies are generally sympathetic to people with personal debt who have a debilitating mental illness. Again, the level of that sympathy is not guaranteed, and each creditor and collection agency are bound by their specific guidelines. Even if your debt is not entirely forgiven, you might find your creditor/collection agency willing to help by:

  • Putting your debt on hold for a prescribed period
  • Agreeing to only contact you in specific ways and at certain times
  • Allowing you extra time to gather more information related to the debt
  • In the case of your creditor, agreeing to hold off sending your account to a collection agency
  • Enlisting a specialist who works in the field of mental health to work with you directly

Some creditors will take you at your word when you alert them to your mental health issue and will help you plan for dealing with what you owe. For others, you might need to show medical evidence of your current mental health condition. Sometimes all you need is a copy of a recent prescription or a letter from a health care provider. 

How Do You Mentally Deal With Debt?

As any debt collector, spouse, or best friend would advise, the best way to deal with debt is to pay it off. But debt management is not always so easy, especially when you are not up to the task. The best way to mentally deal with your debt is to make a list of all your debt and finances to put it in perspective. Creating a clear vision of what you are up against without becoming overwhelmed can help reduce the stress that you are feeling.

Figure out a budget

If you are capable or if you can enlist someone to help you, get a handle on what you spend weekly.  This would be a good first step to addressing your debt and mental health. Consider the income coming in compared to the money going out. This will provide a clearer picture of where you might be spending frivolously and how you can start making payments towards the debt you owe. Budgeting is also a proactive step and will focus your mind on something other than just sitting around worrying, frozen in fear. 

Know your rights

Did you know a debt collector cannot contact you before 8 AM or after 9 PM your local time? That a collector can’t call you at work unless you have told them they can do so? That your lender and a collection agency both need to provide you with an itemized statement of your bill when you ask for it? And did you know that unless you authorize someone else to speak for you and your debt (which we will cover in a moment), a collector cannot talk to anyone but you—not even your spouse or a parent.? In fact, if a creditor calls and gets your voicemail, they can’t even leave a message that in any way hints what they are calling about. They can only leave their name and the name of their company.

These and many more guidelines protect you by law under the Fair Debt Collections Practices Act. You do indeed have some rights even though you rightly owe some money. There are plenty of debt relief options, you can explore them and choose the best path to help you become debt-free. 

Learn that not all debt is the same

‘Secured debts —car loans, your mortgage, etc. —are almost always connected to an asset.  These debts need to be addressed and paid in full first, so you don’t put those assets at risk. 

Dealing with your ‘unsecured debts’ is where you have more wiggle room. For instance, did you know that medical debt takes the longest time to be flagged to a credit report? This is because medical bills are often incorrectly calculated, insurance companies fail to make full restitution on the percentage they owe, and medical procedures listed are often easily interposed with others with a mere keystroke. Especially if you are undergoing regular medical treatment for a mental health issue, you need to be vigilant about your medical debt.

All other debt, which may be considerable and mounting, is debt you can at least address with each of your creditors. You can discuss payment plans, negotiate down your debt or other options.

All of the above will undoubtedly help you to better mentally address your stressful situation.

What Are Some Ways To Cope With Debt?

Almost all debt advice starts with this #1 rule; pay off your debt as soon as you can. But for far too many of us, ‘as soon as you can’ is far down the road.

Individuals with mental health concerns are not the only people who could find themselves in debt. Far from ignoring what you owe to alleviate stress, facing your debt by even opening the last collection letter that you ignored, might be a first step towards getting you into the game of coping with your situation.

That call to a lender/creditor, or even a collection agency might surprise you. Just be sure you know exactly what you are going to say, what kind of a payment plan you could adhere to, and what details of your mental health issue you are going to offer…if any at all.

Negotiating on your behalf

If you have a caretaker, you could also strategize to have them look through your paperwork with you and even call the creditor on your behalf. Of course, you would have to first identify yourself, then explain who will be speaking for you and why you are giving this person your proxy. But if you find the process of calling to deal with your debt too confusing because of your specific challenges, an intermediary could do well as your mouthpiece. 

If you have endured a mental health issue for a long time, you might be assigned a caseworker or even an attorney. They, too, can contact a creditor on your behalf.

Awareness of mental health issues has grown leaps and bounds over the past few years. Better laws, newer programs, and advances in therapy and pharmaceuticals have made it easier for people suffering from mental illness and their carers to advocate for them. 

The specifics of debt management, debtor’s rights, and the various options clients and collection agencies can offer have also seen positive strides. Quite simply, your creditor wants you to pay the bill you owe; they do not want to give it to a collection agency where they will have to surrender a percentage of the balance owed. Retail collection agencies do have restrictions around how they can approach a debtor, especially someone who can prove a mental health issue.

For those under the double stresses of debt and mental health concerns, there are ways to make your life more manageable. 

Hidden Cost of Debt | National Debt Relief 

Debt Help Takeaways:

  • Face the debt with a budget considered 
  • Learn precisely the amount  you owe and the kind of debt it is
  • Consider  getting on a payment plan for some of your bills
  • e Enlist someone to help you wade through the paperwork and be your point person of contact to your creditor
  • Advise those you owe money to of your  mental health issue 
  • Learn more about how a debt relief company works to help you get out of debt quickly

All of this and more will undoubtedly bolster your financial health and ease your mind. But you can’t afford to ignore your debt and live a life of stress, you need to act now.

Survey methodology:

This random double-opt-in survey of 2,000 Americans was commissioned by National Debt Relief between December 13 and December 15, 2021. It was conducted by market research company OnePoll, whose team members are members of the Market Research Society and have corporate membership to the American Association for Public Opinion Research (AAPOR) and the European Society for Opinion and Marketing Research (ESOMAR).

At National Debt Relief, we take pride in empowering people to regain their financial stability through our proven debt relief program. Contact us and talk to a financial expert who will work with you to find the best option to settle your debt and help you achieve financial independence.

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