The statistics below from a Royal College of Psychiatrists report show that debt is not only a financial problem it is also a major health issue:
What is the relationship between debt and mental health problems?
- One in four people has a mental health problem.
- One in four people with a mental health problem is in debt.
- One in two people in debt have a mental health problem.
- Debt may be a cause and a consequence of mental health problems.
Any person working in the finance industry must be aware of these problems and the possible impact of mental health on the ability of a client to make reasonable decisions regarding their finances and their ability to manage their finances. Most importantly they should know when to seek the advice of a health professional.
It is possible to create a mental health problem in an individual by placing them in a financial situation that they cannot manage thus creating stress and possible mental breakdown. For example the offer of credit facilities to an individual who does not fully understand the consequences of high interest rates and default penalties.
The very uncertainty and threat of debt makes prompt action imperative to avoid stress induced mental health problems. Stress levels often reduce significantly once a solution and hope are offered to a client.
Debt consultants must understand the importance of providing a supporting role for its clients (50% of whom may suffer from mental problems) through the financial restructuring process which can be complex and very stressful. They must also ensure that support is offered after the immediate financial crisis has been dealt and help with the management of domestic finances and plan a roadmap to continued financial recovery.
Without providing this support and being sensitive to the stress experienced by the client it is possible that the very introduction to the debt restructuring process could cause mental health problems or make existing conditions worse.