Mental Health issues: should we stop people borrowing money?



  • LyndsM
    LyndsM Forumite Posts: 42 Forumite
    Registers whether voluntary or not, I don't think are the answer. But if banks and cc companies checked in with customers say, once a year, to ask the questions - are you still working? has your income changed? can you still support the debt you have? maybe they could alter their lending approach accordingly. Of course this would mean them treating customers as individuals, something which they are notoriously bad at. And it would cost them money but then, so do unpaid debts.

    Of course some customers would lie, there will always be those who have a less than honest approach to life. But most people I'm sure are basically honest. It seems so silly that a bank or cc company will take on a customer when they are earning a certain amount of money and then continue to treat that customer as though they are still bringing in the same amount of money years later.People like me, who are honest but perhaps in the grip of something they can't control would I think gladly tell the truth. These are only financial questions, not questions about our mental health, so no stigma should apply. It would give the opportunity for a mutual approach to financial mangement by company and client.

    ksh123: This is an incredibly sensible solution. I think you are absolutely spot on here, for 2 reasons:

    Firstly: have my own issues too (BP) but have never got into debt to pay for a 'spending spree' - my diagnosis may be the same as other people's but the illness manifests itself in different ways for different people. That's not to say I never will, however I don't think we can (as a nation) decide that a blanket 'no borrowing' for anyone diagnosed with mental ilness is viable as it will not always lead to unrepayable debt.
    Also, who decides which level of mental illness a person has? The bank? No thanks. Your GP or the health service? Notoriously shoddy at early and more importantly correct diagnosis.
    People could potentially be barred for life from any kind of borrowing for what could subsequently be a short term mental health problem - such as being signed off for a few weeks with stress after a divorce (and that includes not just a mortgage, but also any money saving benefits to be gained, such as insurance cover, by paying for items on credit cards and then paying off the balance in full - so not just 'bad debt').

    Secondly: I'm curious as to how many people go on such spending sprees who don't have a mental health problem. I have several friends who regularly over spend, accrue more debt, chase their tails endlessly trying to pay it off but who would also never consider themselves, nor be considered by others, to be mentally ill. In the rush to prevent the mentally ill from borrowing, we could be risking concentrating our efforts (and, lets admit it, the usual media frenzy and ensuing common beliefs and legistlation) only on the mentally ill and leaving the rest of the debted population to fend for themselves. The choice then: declare yourself mentally ill and be free of debt but stigmatised forever more, or struggle for eons to pay off the debt or go bankrupt. Not much choice, really.

    ksh123's suggestion that ALL borrowers are routinely asked to clarify changes in circumstance - and lets hope, given some assistance at that point if needed - at regular intervals during the life of the loan/debt would address these issues for ALL people in debt, not just those with mental health problems. It's just a wonder that these questions aren't already asked! :eek:

    As far as I'm concerned (and I speak here solely for myself and my own experience, I can't comment on any other's level of mental health issue) I'm a person with a condition that sometimes makes me ill. It can be managed, like many medical conditions, and the 'ill' phases can be reduced in frequency and duration. I'm distinctly uncomfortable with being forced to class myself as 'permanently ill' because, quite frankly I'm not. I'm not a danger to myself or others physically or financially 100% of the time, not even anywhere near50% of the time and with treatment more like less than 10% of the time (that's over life, not day to day!).

    I'm not saying I should be allowed to take out huge loans on a whim, of course not, but to be barred altogether so that I can't jointly own a house, pay for anything on a credit card, buy a sofa on credit just because of my condition is daft. Yes, I'm aware that there may be times when I am unable to work, but then that could apply to any of us (redundancy, other ill health etc). Should those with say, an exisiting back problem or asthma be prevented from any borrowing too, because their condition may worsen one day also? :confused:

    Perhaps the problem could be addressed in a different way: Now that I'm fully aware of my condition, I have altered my lifestyle and working pattern so that I can put aside money for when I need to take time off from work (funnily enough, I even get better sooner this way, how surprising :rolleyes: ), and I don't force myself to do the 'rat race' that send so many borderline or coping mentally ill right over the edge. It's not been remotely easy to do, in fact it's been the most difficult thing I've ever had to do but the alternative is either to 'crash and burn' one day or to give it all up and become a burden.
    I don't earn nearly as much, but on the other hand I don't want to kill myself nearly as much either so it's a good trade off as far as I can see :D
    I'm far more use to my family and society living this 'tailored' lifestyle.

    Anyway, end of essay! ksh123, I agree!!
    Now, how do we go about implementing this? Any ideas?

    Cheers all

    Mad, but not generally bad, or especially dangerous to know...
  • Life_On_Mars
    Life_On_Mars Forumite Posts: 53 Forumite
    I think the mental health thing is a bit of a 'red herring'. It's surely just about poverty and ability to pay back.

    So, it's the lenders who should be held to account for their unscrupulous profiteering from others' misfortunes/ill-health and (often temporary) incapacity.

    I work in mental health. One of the key things for me is noticing and acknowledging with people changes in their behaviour that might indicate that something is wrong, or that they may be experiencing difficulties or that they may be becoming unwell.

    Is it too much to expect the banks to notice and acknowledge changes to someone's spending or credit habits, too, and to respond in a caring and reasonable way?
  • EverDecreasingCircles
    EverDecreasingCircles Forumite Posts: 6,604
    Part of the Furniture 1,000 Posts Name Dropper
    An interesting and emotive issue.

    The only thing I have to add really is that anyone can suffer mental illness at any time. It does not discriminate and it does not consider if you can afford it or not. It would be a difficult line to draw.

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  • saverseven
    saverseven Forumite Posts: 5 Forumite
    I never took out a loan - one of those people that had no credit rating, because they had no credit - but had an overdraft.

    Had a massive breakdown. Lost job, but had a tiny income from odd band gigs as session musician. Waited until the pile of (unopened) bills got to be several inches thick and then chucked the lot. Kept doing that. Got very thin and washed in cold water. Didn't think I was ill, just useless. This went on for 2 years til I went to doctor – for something else entirely! - and got a diagnosis of severe depression.

    Kicked out of flat, I had tried to claim housing benefit but it took over 12 months for claim to be processed and landlord got fed up.

    During this time, I tried to make an arrangement with my bank to pay off o/d in small sums, they weren't interested - so I didn't dare put any money in the account coz bank would have swallowed the lot .

    It would have been great if the bank had really had a debt management team, not a bunch of bullies. They scared me off when I couldn't stand up for myself and felt really vulnerable and guilty for being in debt to them and piled on the stress when I could least withstand it, all they would say was, "you've taken the money, now you have to pay it back" and do you know how much this big fuss was for? Four hundred measly quid.

    Finally managed to save the financial situation with help from CAB, local mental health team - I paid off all debts (including to utilities and landlord) whilst on benefits. Am now fatter and wash in hot water, have just started a part-time job.

    I was always prepared to pay back, and I did. I don’t think a person like me should be prevented from getting a loan in future just because of this. I was made to feel like anirresponsible, careless , someone who was just trying to pull the wool over the eyes of the bank, when I wanted to pay them all along! I still don’t understand why they wouldn’t enter into a payment scheme with me, it would have saved so much trouble and distress over such a tiny amount.

    I understand that some people get into trouble over huge amounts that have been irresponsibly lent by financial institutions, but I think a bit of listening could go a long way. Perhaps going back to the good old days when you spoke to real person that knew you and your circumstances? I’m sure that would have helped my situation, instead of having to explain and re-explain to some person (different every time of calling) in a debt management team in an office who knows where, who has no understanding, knowledge, just a screen and a script.
  • JasonW_2
    JasonW_2 Forumite Posts: 705 Forumite
    You have to bear in mind as well that people can develop mental health issues by getting into debt in the first place. They may be "normal" and happy and run up masses of debt, may be living with someone, or spend beyond their means, then one day, it falls apart; they can't pay, their partner walks out and leaves them with loads of debt.... and so on.

    This can cause worry and anxiety obviously, and can led to depression, and can damage people emotionally and mentally if it's severe and prolonged enough. A person can be depressed and not know just the same until an event triggers the depression and they slide down to the lowest they have felt, then maybe then go to the docs and get labelled as another mental health case. I have/had depression before and for the last 6 months do not consider myself to have it, although I'm sure I do, it's just that things are finally working out for me, new job, loads more cash etc, so that eases the worry, therefore I'm not attacking people with depression in any way.

    Redundancy as an example, out of a person's control can also cause depression, which causes someone who is getting along fine to suddenly find themselves with no income to pay for the mortgage and debts and eat, and make themselves seriously ill. In a vicious cycle, they sometimes borrow more to get more breathing space but ultimately it will catch up on day unless a minor miracle happens, so it's not really clear cut to say if you're depressed or emotionally unstable, you can't borrow money. People comfort spend like they comfort eat, spend to make themselves feel better and when depressed anything that makes you feel better, try convincing yourself not to do it..

    I think it is a fascinating subject though and congratulate Martin for doing an article on this, and whatever else comes from this, it will be an eye opener I am sure, and has the potential to help a great number of people, who may realise they are depressed, or should not spend anymore and get themselves sorted out (again I know that is not easy). It's hard to know which causes which; did the depression cause the debt or did the debt cause the depression?
  • JasonW_2
    JasonW_2 Forumite Posts: 705 Forumite
    Another point is perhaps the affordability and credit reference agencies are not the best way for a bank to decide if you can afford it. I know they need to base this on something, but let's face it the CRAs are a bit of a joke, and can only go by info they are given and only pass on info they have - so what is the actual point of them apart from a central place to pass on semi accurate info? If we are to trust our details with someone then they should be regulated and so should the banks who pass this info over with massive fines for incorrect info.

    Some accounts do not appear on a CRA file, so bank B may lend you the money they might not have otherwise if they saw Bank A's black marks - another example of inconsistency. Likewise, a mistake 5 years ago through ilness, redundancy, or whatever can leave 'black marks' then present day, you need a loan or a credit card, have a decent income, no real debts and you can be turned down for this!!

    It feels like a lottery sometimes, with often surprising results, but can we blame the banks for this? Should people only ask for a loan or a credit card when they actually need it? What can we do about people who lie about income and other debts - after all, if you say you earn 10k and want a 10k loan, you will generally speaking have a better chance if you say you earn 20k and want a 10k loan. I hate banks as they are faceless and only care about profits, however surely we can't blame the banks for this type of situation?
  • MSE_Martin
    MSE_Martin MoneySaving Expert Posts: 8,273
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    Just a quick thank you. I'm finding this debate fascinating - not easy - but really interesting and its helping to educate me on a subject I wish I knew more about. The quality of the responses is truly fantastic, and thank you to everyone who has shared what is for them a difficult experience

    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
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  • mynarrowboat
    mynarrowboat Forumite Posts: 4 Newbie
    I have been a lurker for over a year now - but because of this thread, I felt I wanted to say my piece.

    My Partner is bipolar, and had her first episode after running her own business from home as a candle maker. We were told it was a nervous breakdown at the time. and that she would fully recover.Our savings (thank you dad for drumming that into me) saw us through - barely as I was unable to work either much for 3 months caring and visiting and sorting out her commitments.

    The second time devastated me as well as her. This time it was diagnosed as BP (only because I forced the issue so they told me). This time she brought every family member a present....£1000...that we didn't have. I managed to get most of it back for a refund - the shop was quite understanding once I had told them.

    The third time, was not so bad as I recognised the signs.
    Trying to get help was appalling. Have you ever tried to get someone who feels on top of the world to a Hospital?

    During depression phase, money makes them feel a little better about themselves for a short time. During mania, it has no value whatsoever...may as well be confetti.

    I'd have to agree that the 'ill' phase is tiny in comparison to the rest of their lives, so how do you police that? I just don't know.
    Education of the general public will be a tough thing.

    Some sort of Grace period that's longer than it is already would also catch those that need the money in a short space of time legitimately too.
    How about the banks accept an "temporarily incapacitated" risk and write off the debt from a central fund (ultimately paid for by all of us). Maybe some sort of insurance scheme for this risk, that didn't cost the Earth?
    I doubt this will happen either.

    So what about a dual signature requirement for all loan applications, in front of staff (i.e. bring a friend / family to state this person is acting in full capacity of their wishes)? Open to abuse too.

    I don't have any more answers than anybody else I'm afraid.:confused:

    But to those suffers, don't give up. It has taken my partner a few years but now has started her own business once again. This time in a controlled manner, not trying to take the World on. We also downscaled and live better within our means. I still work for myself, and my company is 10 years old now. We found the value of 'living' not climbing the commercial ladder. We take more time off now too. We also have a son now.
    This site has helped me, and my friends too. Never underestimate the value of your friends. They can be a tower of strength in those dark nights.

    Keep your chin up.

  • feistymiss
    feistymiss Forumite Posts: 29 Forumite
    i suffer with anxiety depression stress panic attacks et al, and IBS since i was 18 and figures and money present a real problem to me, im not stupid, im just easily flustered and now realise if i can deal with things in my own way at my own pace that i can just about manage, on good days, on bad days, forget it, i forget my pin, get the numbers transposed, cant talk, cant think, being in a queue in the bank throws me and now im on anti depressants and these have completely twirled my brain up, so i have to keep to a very limited budget

    i am on income support, with incapacity benefit, i do feel trapped, very trapped and this is getting worse now with each successive year

    trappped in my body, trapped in my head, trapped by information, trapped by lack of support, yes, there is support, but how do you get out what is in your head to deal with it

    ive been to psychotherapy, counselling, all kinds and the only reason i agreed to go onto antidepressants is the emotional state was never stable, and i couldnt cope with the blue days and the crying and the days i wasnt like that meant i couldnt always judge if i was making sound judgements

    it actually says this on the packaging for the anti depressants

    i hate how the banks have billed me before when my giro hasnt gone in, so i resorted to a post office account, but this also meant i had to go out to fetch my money and some days i cant cope with that, so i have now gone online again which means direct debits set up, whereas before i only paid a bill when the money arrived and put up with the computerised letter telling me i hadnt sent the payment on the designated date

    i always pay my fortnightly bills on the date i get my income and only use cash for my own outgoings

    and in this way i am vulnerable, using the online system, as again you have to be precise, so i asked for the help from a long term partner so that he has access to all the pin numbers etc, but this effectively means if he clears the account ... i have no control over it

    we dont live together

    he has mismanaged my money before, i do get emotionally pressured for money from two sources and at the mo i cant get any help to prevent this, even tho im aware of it, i cant always prevent myself, partly from the emotional or logical angle, or the psychological angle

    im fairly sensible, well to the point of denial, i live on ... well lets say i scrape by, which again adds to my overall mental health, both from the point of view of a bland existence and diet whereby being aware all my money is going out of my account leaving me with little to no choices

    in my previous location i approached the bank manager, who had noticed "discrepancies" shall we say and was very supportive, i have now moved but have "fallen" into the same trap as before and this time i dont know how to help myself

    i do deal with it, on occasion, then get anxious and revert back to old habits as a place of safety

    this has taken time for me to realise my mess, borne about by low self esteem, domestic violence, abuse etc - this is 7 years, you just cant deal with all of it all of the time

    none of which i have done to myself, i mean i dont drink, smoke, or inflict any other harmful things onto myself other than my mental health allows me to be more vulnerable, to the extent i isolate myself from the world, as its easier to deal with than all the messages that accompany interaction

    i am a little intimidated by this bank, as their private discussion area is limited to the extent you have to book it a week hence and it is a small local place i have moved to, where everyone knows everyone, and its all first name terms

    i dont know how to safeguard myself

    i set up direct debits when i moved, tho i think this is hard to deal with on a fixed income, cos if the month outgoing is higher, its gone or at least, has to go, so your budget has to be adjusted accordingly

    and now all my income is going into the bank, it means i have the facility to use a debit card to make payments .. for food, where i used cash previously

    but its also more confusing as the statement takes a week before you recieve it and you have to keep more of a rolling figure in your head or written down

    (aaagh) which i do manage but with my partner accessing the account, its additional strain

    i know the best suggestion would be to manage the account myself, but again i have got in a mess previously

    i dont borrow money, i never would go into debt more than thro the current account with the bank, thats hard enough, if i dont have it, i go without, simple as
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    rosepink wrote:
    It was also very revealing that as soon as I rang on behalf of a patient, and said I was from XXY Cab in a mental hospital, how the attitude of many creditors changed to being much more helpful and less aggressive. I often managed to get sums written off if there was no real chance of it being repaid.

    This is really what one would expect: after all, it is the banks who are taking the risk of lending to people who may not be able to repay.

    The issue to me seems to be: is it fair to put people who have mental health problems through the normal debt recovery process, including bankruptcy?

    Or should there perhaps be a unit (within the CAB or NHS maybe?) which was able to liaise with the lenders in cases like these, and get the debt written off.

    If the lenders knew there was an added risk with this type of lending that meant they couldn't use the normal debt recovery systems, you might find they'd be a lot less willing to lend the money in the first place.
    Trying to keep it simple...;)
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