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."

The impact that debt has on people facing mental health troubles was underlined by Lee Brookes, from Manchester, who told the BBC of his struggle to face up to his financial problems.

Lee has bipolar disorder. Over a series of manic episodes, he lost control of his spending and worked up £30,000 of debt.

"When I was manic, I would spend without thinking of consequence," he said. "Then with the inevitable fall came a spiral of destructive thinking.

"I'd think about losing my house, my job, my friends, my family. Then it became harder to face up to the debt."

Despite entering NHS crisis care, the interest on Lee's debt kept accruing and the visits from bailiffs began.

Commenting on why he didn't call his bank and utility companies to explain why his debts were spiralling out of control, he said: "When you are that bad, you can't even pick up your toothbrush to clean your teeth. You can't even call your mum to say, 'I need your help.'

"So calling the bank and asking for extensions is impossible."

The idea of a "breathing space" is already being considered as part of the Financial Guidance and Claims Bill. It would apply to anyone who is in severe debt, but has shown a willingness to seek advice.

Charities want the scheme extended to anyone whose clinician diagnoses them as being in crisis. The proposal has cross-party endorsement from Conservative Johnny Mercer, Labour's Luciana Berger and Liberal Democrat Norman Lamb.

Mr Lewis said extending the breathing space scheme would give people time to recover, rather than worry about bailiffs at the door.

"And with the tragically common marriage of mental illness and debt, the simplest way to do it is assume all in serious mental health crisis are likely to be struggling with their cash," Mr Lewis said.

His charity's research found examples of people losing their jobs and working up fees because they were too ill to pay their debts. Others were sectioned then returned home to find court summons. On one occasion, a person attempted suicide after visits from bailiffs.

Consultant psychiatrist Dr JS Bamrah has worked for the NHS in Manchester for more than 30 years. He says he is seeing far more mental health problems linked to debt.

"It's very common now, especially since austerity. Their rational thinking has gone out of the window. Patients start thinking, 'There is no point in living with this debt. I can't burden my family with this.'

"Suicidal thoughts are very common," Dr Bamrah said. "And yes, on occasion, it spirals and we've seen people who take their own lives because of their debt."

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."