Debtors with mental health problems need 'breathing space'
Thousands of people with mental health issues are trapped in a spiral of escalating debts, a charity says. The Money and Mental Health Policy Institute said that in 2017, some 23,000 people were being pursued while in hospital for mental health problems. Thousands more were in a similar position while receiving mental health crisis support in the community.
A coalition of debt groups wants the government to allow "breathing space" for people with mental health troubles. The government is considering whether to allow individuals in problem debt up to six weeks' grace from interest, charges and enforcement action by debt collectors if they seek help and financial advice. Charities want the breathing space scheme extended to anyone accessing psychiatric in-patient care or the care of a Crisis Resolution Team.
Personal finance expert and broadcaster Martin Lewis, who founded the Money and Mental Health Policy Institute (MMHPI), said chasing people for debts only worsened their problems. "It's time to stop people in mental health crisis being hassled over debt, which risks making recovery harder and means they'll be even less likely to repay creditors in future," he said. "I [have] long campaigned for breathing space for those in crisis debt - but for those having a short period of acute mental illness; suffering panic attacks, unable to open post, call the bank, or even think coherently - going to a debt counsellor in order to call a halt to things is just impossible."
Energy UK, which represents energy suppliers, told the BBC: "Suppliers take their responsibility to support customers facing difficulties extremely seriously. "Last year, along with the Money Advice Trust charity, we published a guide to help energy suppliers better identify and support customers facing mental health issues."
UK Finance, which represents banks and lenders, said: "Our members want to help customers struggling with their finances including those with mental health issues. We agree to giving customers a 'breathing space' to get advice, while taking individual circumstances into account."
Mr Lewis said that lenders were often sympathetic, but he believed making breathing space statutory would give all parties clarity. "Providers can often be very good if people contact them but that isn't an option for people who have an acute mental illness. If you are in hospital and not functional, then calling up your lender is something that is absolutely impossible because you are not making standard logical decisions," he said.
Lee is back on his feet financially, and is fastidiously saving for his wedding to his fiancée - something that would have been unthinkable five years ago.
He says that might have happened sooner had he been offered breathing space when he was at his lowest. "I came close - too close - to suicide through debt on two occasions. I really hope these changes happen so that doesn't happen to others."