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Lenders Need To Help Those With Trouble Debt Says Mind

Jun 2, 2008
Mind, the UK mental health charity, has suggested that lenders need to act in a responsible manner when dealing with people who have problematic debts.

Comments from the organisation follow the first Mind Week, which took place between May 10th and 17th and aimed to promote better understanding of the link between substantial debt and adverse effects on individuals' mental health. According to a recent study released by the group to coincide with Mind Week, more than nine out of ten (91 per cent) of people of those who had experienced debt trouble said that it resulted in a worsened state of mental wellbeing.

The study also suggested that for those who were experiencing problem debt, the most common reasons cited were mental health problems, living on a low income and difficulty with money management. Two-thirds of those interviewed said that mental health problems had been a principal contributing factor in their troubles with money.

Following the campaign, a spokesperson for the charity has said that loan providers and credit card companies need to make sure that they treat debtors in a way that does not unduly affect their emotional stability.

The representative explained that for many people who are struggling with credit card debts, secured loan repayments or other financial commitments, the need to be repay items can become intolerable. She added that for many, their natural instinct is to withdraw from the problem and ignore it rather than seeking help from an independent financial advisor.

Mind urged banks and lenders to make sure that debt collection agencies were not placing people under mental strain and called on them to adhere to guidelines set out by the Money Advice Liaison Group on how to treat those with debt problems fairly and appropriately. The charity asserted that lending institutions needed to be particularly mindful of those who have informed their bank that they suffer from mental difficulties.

For those who are feeling the strain of rising costs of living, taking out a debt consolidation loan may provide a financial lifeline and help to reduce the burden of monthly repayments. By stretching debt contributions over a longer period, people may find that their financial commitments become much more manageable.

Commenting on the charity's progress, the Mind representative said: "We've been working with the Financial Services Authority (FSA) to get a few things in place and we've just launched a new section on our website that gives debt and money management advice to people with mental health problems. That is somewhere people can go if they are worried about their debts, to look at advice about how to handle benefits, how to handle financial fluctuations and it points people in the right direction for other health services as well. With the FSA we're hoping to set up money advice and debt management workshops, through our local Mind association network, so people can drop in and get more advice."

Last year, research from the Alliance Trust Research Centre suggested that many Britons had lost track of financial reality and were in danger of seeing their debt problems become more dramatic in the future.
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Steve Smith writes for 1 Stop Finance Shop. A one stop shop for all your bad credit loans, debt consolidation loans and personal loans.Visit Today
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