Debt Collection & Your Health

If you’re dealing with debt problems, you may have noticed how it can affect your mental and emotional state. But it’s easy to underestimate how much financial issues can impact on your mental and physical health. Or how important it is to take action as soon as possible to look after yourself, and those around you.

There’s no shame in experiencing money issues. A 2019 survey of 2000 people in the UK suggests around half of the UK adult population were heading into 2020 in debt, with an estimated 5 million owing more than £10,000 in loans and credit. At the end of January 2020, personal debt in the UK was measured at £1,680 billion, with an average unsecured debt of £4,264 per UK adult. So, you’re definitely not alone, especially due to the impact of the Covid-19 pandemic.

Very few people haven’t had their finances affected by Coronavirus, whether it has been due to lockdown, being furloughed by your employer, or trying to keep your own business and self-employment afloat. Around 3.8 million people have already borrowed to make ends meet, with most using a credit card (1.7 million), an overdraft (1.6 million), or a high cost credit product (980,000). It’s causing the biggest issues for the majority of people who are on low or middle-incomes, and those already in debt before the crisis began.

And don’t be embarrassed or scared to admit that circumstances may be affecting your health. Debt can make existing conditions much worse, or trigger new or undiagnosed problems. Help and support are readily available, but only if you share the fact you’re struggling with creditors and debt collectors. Around half of UK adults show one or more characteristics of being potentially vulnerable.

It’s easier than you might think. You can quickly and easily use our DebtBuffer letter to inform creditors (and debt collectors) that you are vulnerable. And this should mean you’re given more time and space, and any contact you receive should show more consideration in how you’re treated.

You need to treat your wellbeing as a priority. While some people may be able to get through the pressure and stress of the debt collection process, it will affect everyone differently. And without help and support, it can have tragic consequences with more than 420,000 people in England considering taking their own lives whilst in problem debt. And over 100,000 people attempting suicide due to their financial situation.

The saddest thing is that much of this may be avoidable. Some problems are caused by long-term factors such as poverty and financial insecurity. But many come from sudden triggers such as intimidating letters or phone calls, when the reality is that these can be handled with debt support and advice. As a result, the Financial Conduct Authority, and even the trade associations for the collections industry, produce guidance on how creditors and debt collectors should help anyone vulnerable rather than making things worse.

When you’re starting to miss payments to your creditors

Everyone can miss the occasional payment for a credit card, loan or other financial service. It might be that you simply forgot, or cancelled the wrong direct debit. And it can be sorted out quickly by contacting the creditor and making a payment.

You’ll take a slight hit to your credit score but it differs depending on your individual circumstances. So, you shouldn’t worry about a single slip-up, as you’ll only lose around 130 points (using the Experian 0-1000 score as an example) and the impact will reduce over time.

But if you’re starting to miss multiple payments and finding it harder to manage your financial situation, then it’s time to take action. Especially if you already have diagnosed mental or physical health conditions.

Conditions such as anxiety, depression and acute stress can make it harder to deal with money matters. Half of the British adults with debt problems also have a mental health issue. And in a survey of 5,500 people, 86% said their financial situation had made their mental health problems worse.

Problems can include being unable to understand or remember what you’ve signed up for, finding it harder to take decisions or action, or just wanting to avoid dealing with everything.

Starting to miss payments regularly can also impact your physical health. You might find it more difficult to sleep or exercise, or rely on cheap comfort food. And you might start drinking more alcohol, or smoking more.

More direct health impacts can also include headaches and migraines, increased blood pressure, muscle aches and pains, and being more susceptible to all kinds of illnesses due to a lowered immune system. That’s particularly troubling if you’re already suffering from related health problems, and if these contribute to your financial problems.

Making missed payments more manageable

Wanting to hide away from financial problems is completely understandable. Especially if you have multiple companies chasing you. But unfortunately, it will only make the situation worse for you.

The way to reduce stress and worry is to start taking back some control of the situation. And while it may seem scary to be dealing with letters and phone calls chasing you for payments, there is a lot of help available to support you.

Your first step should be to contact your creditors. We have DebtBuffer letter templates to help you do that in writing, letting them know that you’re potentially vulnerable, and that you’re in the process of putting a repayment solution in place. You can also inform them of your preferred method of contact, as all important information should arrive in writing, so you can end phone calls, for example.

Straight away, your creditors should give you some space and breathing room, reducing the contact through your letterbox or on the phone. And if you’re classed as vulnerable, many companies have dedicated teams to handle your situation in a way that’s more sympathetic and suitable for your needs. If you owe debt to a bank and are vulnerable, they’re also less likely to pass on or sell your debts to a collection agency.

You can also stop answering the phone to numbers you don’t recognise by using caller ID or blocking calls from your creditors.

It also gives you time to get free advice and support from both debt charities and organisations for your financial issues. And to also get help for any physical and mental health issues. For example, banks should give you 30 days before chasing any debts again, potentially extended by another month in certain circumstances.

When you’re starting to miss payments, you have the widest range of options available for help via debt solutions and repayment plans. Creditors might give you a payment holiday to let you get back on track, or accept reduced payments temporarily.

A Debt Management Plan could make sense, as this is a voluntary agreement based on affordable monthly repayments. And if it’s arranged by a third party, this will cut down on contact from creditors. It also has the least impact on the rest of your life.

More formal solutions, such as IVAs, Debt Relief Orders and bankruptcy are also options, and aren’t as scary as you might imagine. It’s also possible to contact creditors and ask them to write off debts that you have no chance of paying, but this is unlikely to be accepted except in the sad case of terminal illness.

Receiving default notices

While many people will cope reasonably well with the occasional missed payment, it can be harder to stay calm when you start to receive default notices. But it’s important to realise that these often aren’t as worrying as you might think.

Most consumer debts, such as credit cards and personal loans, are covered by the 1974 Consumer Credit Act. And while this has a lot of useful protections for anyone in debt, it also means creditors are legally required to send warnings after two missed payments. The specific rules for legal wording mean these can sound particularly intimidating. Especially when it’s printed in block capitals, and is out of date (as you should be going to specialist debt advisors and charities, rather than solicitors or trading standards).


A default notice is the official term used for missing multiple payments (it’s rare that it will be issued after just one occurrence). It will often request that you pay the full amount owed, giving you a bit of time (usually two weeks) to organise a solution. Defaults also cause a sizable drop in your credit score (-350 points with Experian, for example), and are recorded for six years.

This can have a big effect on your physical, and particularly mental health. Suddenly you’re receiving demands to repay the full amount you owe, which may run into thousands of pounds. It’s not surprising that people may panic at this stage, or that it can trigger acute financial stress.

The impact will differ for every individual, but anxiety and depression are common. There’s growing awareness that money problems can also trigger other mental health issues including “debt-anger syndrome” and even Post Traumatic Stress Disorder (PTSD). Many of these issues won’t just affect you, but also people around you.

You might start feeling numb or emotionally detached, become more irritable and easily startled, or associate phone calls and the sound of the letterbox with worry.

Being worried, upset or angry when default notices arrive is understandable. But you’re still at a relatively early stage of the debt collection process.

Dealing with defaults and your health

If you’re receiving default notices, it’s important to pause, take a breath, and try to stay as calm as possible. It’s important not to ignore the letters, but you need to avoid panic and being tempted to borrow more money to try and pay off your existing debts if it means you’ll end up in a much worse situation.

Defaults will give you time to act. So, if you haven’t already declared yourself vulnerable or asked for time to put a solution in place, it’s important to do it now with our DebtBuffer letters. And you should be speaking to specialist debt charities and organisations for advice, if you haven’t already.

You may find that if you’ve entered into a Debt Management Plan that you’ll receive defaults as you’re making reduced payments. In this case, you should check with your DMP provider, but it’s generally more of a legal obligation from the provider rather than a threat of further action.

It may be upsetting to know that defaults will have a big negative impact on your credit score. But the flip side is that you can accept that your file will be poor for the next few years, and stop worrying about it. Even if you pay off a default, it will still be on your credit file for six years, so this means it’s often better to look at solutions which will write-off any unpaid debts.

An Individual Voluntary Arrangement (IVA) is arranged through a third-party Insolvency Practitioner and is based on affordable monthly repayments. Unlike an IVA, it legally prevents creditors from contacting you directly, and from further enforcement action.

You can see more details in our dedicated IVA guide, but the agreed monthly budget should include any healthcare costs as part of your basic standards of living. And after the IVA ends (usually 5 years), any included debts you haven’t paid will be written off, allowing you to become debt free again.

Unlike bankruptcy, you typically won’t be required to give up your home. And assets such as a car are protected if you need them as a result of your health condition (e.g. you have a valid disabled badge).

Threats of home visits and court action by debt collectors

The most upsetting areas of debt collection are the threats of having people turn up at your home or ending up in court over money you owe. This can be especially traumatic if you have mental or physical health issues.

Debt collectors don’t have any special legal powers or rights to enforce a debt (unlike bailiffs or enforcement officers). So, they can’t enter your home, and will rarely turn up at your property to try and collect against any debts. Especially as they’re not able to take any items, intimidate you, or demand an immediate payment.

If you ask a debt collector to leave, they should comply straight away. And if they ask for payments immediately, you can tell them you’ll arrange something over the phone or online instead to avoid being pressured into agreeing a larger amount than you can afford.

You may find that debt collectors threaten legal action if you haven’t responded to notices of missed payments and defaults. Unless the money is tax owed to HM Revenue and Customs, for example, this is required before they can take any further enforcement action.

For consumer credit debts, failing to pay is not a criminal offence. And the action will be a Country Court Judgement (CCJ), which gives you 30 days to respond either by agreeing repayments (including via a debt solution such as a DMP, IVA or bankruptcy), or you will then receive a ‘claim pack’ which means supplying information to the court to determine affordable payments.

After all of this, a CCJ will mean you’ll be required to make monthly repayments. You can read more in our detailed guide to CCJs, but essentially it makes your payments legally binding, and allows for debt collection enforcement if you don’t pay. But you can still enter into an IVA after a CCJ has been issued, so you still have options available to you.

If you haven’t disclosed existing mental or physical conditions, they’ve become worse, or new issues have been triggered during the debt process, you need to ensure these are shared with creditors, debt support charities you’re contacting, and in your court documents. If you feel you might be suffering from any undiagnosed mental or physical conditions, seek medical attention and inform them of the stress you are under due to being chased for debts. It’s important to seek professional help and putting yourself first is the number one priority in these situations.

The priority should be to safeguard yourself as much as possible. This means avoiding threats to your home and assets by removing the CCJ if possible, replacing it with an IVA, Debt Relief Order or bankruptcy so that you don’t have the threat of bailiffs or further action impacting on your daily life.

Even if you choose to declare bankruptcy, it gives you greater control over what will happen than if you have action forced on you. This means if you’re required to sell your home, for example, then you’re able to request to have it delayed if you are vulnerable or have children. And you can plan for when it happens to take care of yourself and your family.

You can also avoid selling your home during bankruptcy by selling your share of equity at market value to someone else, such as your family or friends. And it won’t be sold unless your share of the profits will be more than £1000 after any sale costs have been taken off, assuming you can still make your mortgage payments, or if the official receiver fails to take action within three years regarding your property.

Bailiffs and vulnerable people

Bailiffs and enforcement agents (sheriff officers in Scotland), do have legal powers to recover debts via your assets and evictions. But they are subject to strict rules and restrictions, especially if they’re dealing with a vulnerable person.

Popular television programmes focus on the most dramatic cases that bailiffs might be involved with. But in most cases, you can resolve things without anyone visiting your property, and it’s only in specific cases that entry can be gained without your permission.

We’ve compiled a specific in-depth guide to bailiffs, but you’ll receive a notice of enforcement letter seven working days before they can visit you. And their first visit would be intended to list your assets (known as taking control) rather than to actually seize anything. Unless your debt is for unpaid magistrate court fines, HMRC tax debts, or you’ve broken an agreement after they’ve listed your assets, then they can’t come into your property without your permission.

While you don’t have to let them enter your home, you shouldn’t ignore notice of bailiff action. It can be enormously stressful to live with knowledge people could be turning up, and having to make sure family members don’t open the door to anyone that they don’t know.

Notify bailiffs, and the creditors they’re working for, to make sure they know you’re vulnerable for situations including:

  • Your disabled
  • Serious illness
  • Mental health issues
  • You’re pregnant or have children
  • Recent stressful or emotional circumstances (unemployment, bereavement or a relationship breakup)

Along with other criteria (if you’re under 18 or over 65, or you have difficulties reading or speaking English), this should immediately pause any action, while your circumstances are taken into account. It also means that any assets related to your health and care should be protected from being seized, including Motability vehicles or those displaying a valid blue badge.

It’s important to understand what type of debt and bailiff or enforcement officer is involved in your situation to know how to deal with them. If it’s not a criminal offence and there’s no warrant to force entry, then you shouldn’t open your door. Speak to them calmly and politely through the letterbox or an upstairs window and then get free expert advice from debt charities on how to stop the situation continuing.

If you’re in a vulnerable situation due to your health, creditors should cease the enforcement action and take the debt back under their control to find a more suitable repayment option. HMRC and council collections will also look at physical and mental health conditions, take them into account, and stop making the situation more harmful than it needs to be.

If you need to provide further proof of being vulnerable

It can be hard to understand if you qualify as vulnerable, or to admit it to creditors and debt collection agencies. Especially if it’s questioned by any of them. But given the potential benefits, it can be worth sending additional information to help ensure that you receive the care and consideration which you deserve.

Additional documentation to provide further evidence and support your vulnerable classification includes:

  • A doctor’s note explaining any illness or disability.
  • A DWP or Social Services letter about any benefits.
  • Council tax bills showing who lives in your home.
  • A debt and mental health evidence form (DMHEF)

The DMHEF can be completed by a doctor, nurse, psychologist, psychiatrist or social worker. You can read more about the process, and what it may mean in your situation, in our guide Are you vulnerable?

Complaining about harassment impacting your physical and mental health

You should find the majority of creditors, debt collectors, and even bailiffs, take your health situation into account. Unfortunately, not everyone is as helpful and supportive as they should be.

The Financial Conduct Authority regulators most lenders and collection agencies. The FCA Handbook lays out what the companies they authorise should be expected to do. And breaches can result in fines, suspensions and being stopped from providing financial products.

There are also voluntary guidelines such as the Standards of Lending Practice, and those laid out by trade bodies and ombudsman responsible for various sectors within financial services, or for the industry sector the creditors operate in (e.g. if it’s an energy company or telecommunications).

In most cases, your first step will be to register a complaint with the creditor, but to find out how to escalate complaints for any type of debt collection, take a look at our guide to Harassment: What to do about it?

Helping others with debts, and physical or mental health conditions

If you know, or care for someone, with a physical or mental health condition, there are a variety of ways you can help them to manage their debts. And it doesn’t mean that you need to take on any financial responsibility for the money they owe.

It can be as simple as encouraging them to contact the relevant charities and organisations, both for their debts and their health problems. That can be done by telephone or online if it’s easier for the person concerned.

You can also help them to contact creditors and disclose that they’re vulnerable, and our DebtBuffer letters will help you to help them.

And it can be a big help to read through paperwork and help them to understand it, and to organise all the letters and information they might need to tackle their problem debts.

If you want to go further, you can let them nominate you on debt support accounts and with creditors, so you can speak to these companies and organisations on their behalf. Or for a more formal, legal step, there are different powers of attorney which can apply temporarily or permanently to give you more access and control over their personal matters if they need the extra help.

Start putting your health and wellbeing first

It’s vital you ensure your mental and physical health is a priority. Not just for you, but also for those around you. Clearing debt problems will be much easier if you’re able to get support, understand the options available and make choices which will reduce the financial and emotional pressure.

Even just a few days without worrying about another collection letter or phone call can be a big relief, which is why it’s so useful to contact creditors with the DebtBuffer letters and ensure they know you’re entitled to breathing space while you’re sorting out a payment solution, and that they need to take your potential or existing vulnerability into account.

Your creditors and debt collectors aren’t typically seeking to punish or victimise you personally, they’re just trying to recoup as much money as they can for your debts. So, the more you can demonstrate that you do want to make repayments, and that giving you room will mean you may be able to pay a larger amount, the more understanding they’re likely to be.

It’s also worth remembering that debt support organisations are there to give you help and advice, and not to pass any type of judgment. The advisors will have dealt with countless people in similar situations, and may have even been through the process themselves.

No-one deserves to have their health suffer due to their debt problems, whether physically or emotionally. Reducing the stress from your financial matters means you can focus on looking forward to becoming debt free, and being able to concentrate on your future.