The link between debt and poor mental health
By Mr Bankruptcy
28th February 2025
As a debt advisor, I deal with all sorts of clients – from individuals, to sole traders, to directors of companies.
The nature of their problem can be just as varied: the cost of living is hitting individuals and families hard; small businesses are being squeezed out by high rents and business rates; and for companies, the price of energy or increasing wage bills can be crippling.
However, one factor is common throughout – unmanageable debt always affects human beings, whether directly or indirectly.
Debt limits what you can and can’t do with your life but, even more significantly, it can become a real burden on a person’s mental health too, no matter how mentally robust they think they are.
I know this because I had to declare myself insolvent a number of years ago and it took a real toll on my mental state (you can read how it affected my life here). And I’ve been trying to help people overcome this problem ever since.
The facts and figures
Research in the UK has found a definite link between debt and poor mental health. The Money and Mental Health Policy Institute, a UK charity, has found that 46% of people with a debt problem also experience mental health problems.
Their research also found that 86% of the people surveyed said that their worsening financial situation also made their mental health worse.
Behind those facts and figures
Debt is a major cause of stress, anxiety and depression. I think of anxiety and stress as related. Stress is caused by problems you face now, while anxiety is the stress that comes from worrying about the future.
Everyone feels stress and anxiety at some time in their life, and that’s a normal response to challenges. But if you find yourself facing an unsurmountable financial problem, then uncertainty and fear of the future can turn your anxiety into a permanent state.
Anxiety and stress start to affect eating and sleeping, which in turn affect your mood, energy levels and resilience. It becomes harder, then, to take action to deal with your problems forming a vicious cycle, and relationships also begin to suffer.
Mental health and debt
While mental health can be affected by debt, the reverse is also true. The Money and Mental Health Policy Institute also found that nearly 20% of people with mental health problems also have problem debt, which is more than three times the case for people without a mental health diagnosis.
I’ve met clients who had suffered from bouts of mental illness during which they slipped into dangerous debt territory. Depression can destroy the usual self-discipline and energy which made them stay on top of their finances. More debilitating mental illness are likely lead to them losing their job, which only makes their financial situation worse.
What can you do?
Constant worry about debts can have a debilitating effect on anyone’s mental well-being. It’s easy to become trapped in a cycle, losing confidence and feeling helpless, especially with the stigma of debt or the weight of expectations while all the time your debt grows.
We’ve learned in recent years about the importance of talking about our problems, including mental health issues. If you have someone in your life to share your worries with, this can be a critical first step towards finding light at the end of the tunnel.
The next step can then be to seek specialist help. This may start with NHS Health and Social Care, or a mental health charity. But when you’re ready to talk with a professional debt advisor you will start to see that that your situation isn’t hopeless, that you have options and you can retake agency, which is a big step forward – towards financial and mental wellbeing.
You might have wondered why a former bankrupt like myself could be a specialist debt advisor, but I stand as living proof that there is a way to recover from unmanageable debt and to have a life again.
That message can be as important to clients as the debt advice I give.
James Rosa Associates
James Rosa Associates is a firm of debt advisors and debt adjustors. With a supportive, non-judgemental and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who are ready to face up to an unmanageable debt and are looking for a solution.
We also help people involved in a civil or commercial dispute. Our full range of services include:
James Rosa Associates are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients who need bespoke solutions for their specific circumstances.
Find out if you qualify for a free debt consultation
If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk and find out whether you qualify for one of our free consultation service.
Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.