I am in a considerable amount of debt and cannot afford to pay it and think this is now a problem for me. I am being chased for the debt by the companies I owe money to, and this is having an impact on my mental health. Can you offer any advice on what I can do?

I am glad that you have got in contact – reaching out for support is a great first step in tackling issues with debt.

What is a ‘problem debt’?

There are a few signs that may indicate that money or debt has become problematic. This can include paying just the minimum owed for debts, or missing payments completely for our commitments, including instalments to credit cards and loans.

Signs of problem debt can include using credit to pay household bills like rent, council tax, or utilities, or facing court action, or a change in wages. Debt can cause worry for people, and unresolved issues related to our finances can leave us feeling anxious, withdrawn, and depressed.

You may even have reduced the amount of time you spend socialising with friends and family, or you may be avoiding them completely.

Why do people find themselves in debt?

People can find themselves in debt for different reasons, whether that be through an event that has resulted in a loss of income or higher spending, for example being made redundant; illness; divorce; a death in the family; or having a baby.

Dealing with our finances in an honest and open way can help us to get back on track.

How can I sort things out?

Sometimes discussing the situation with the companies that we owe money to can be helpful, as they may be able to offer more flexible payment options to us. By ignoring letters and other correspondence from our creditors, we can risk additional charges being added on for late or missed payment, as well as additional interest being added.

If we reach out to credit card companies and finance providers, they may be able to put a hold on any additional charges being added. It should be noted that this is only a temporary solution and seeking a more permanent way of managing what we owe is important.

There are other solutions available if this is not an option for you, including informal debt repayment plans, as well as more formal solutions. It is important to remember that we do not have to face money worries alone, and that there are sources of support out there that can help if we are struggling with debt.

Building a picture of our current situation can be a good start, including information on who we owe money to, the amounts owed, and anything else that may be useful. We can then use this to communicate with creditors and supporting organisations to move forward more effectively.

I need help with this, but don’t know where to turn to…

Advice Direct Scotland run moneyadvice.scot, providing free, practical, and impartial information and support on a wide range of debt-related issues to Scottish citizens. Our specialist advisers can work with you to assess your current situation; look at your income and outgoings; and consider what to do next.

moneyadvice.scot can help you to negotiate with your creditors or do this on your behalf if necessary. You can contact us on 0808 800 9060 (Monday to Friday, 9am–5pm), or visit www.moneyadvice.scot for more information.

Additionally, moneyadvice.scot can refer you to organisations who can support you if you feel that your mental health has been affected, dependant on your individual situation.