Dealing with Debt

Mental Health and Debt Management

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Your financial situation – including the amount of debt you carry, your credit score, and how close to filing for bankruptcy you are – often has a marked impact on your mental health. However, it’s also possible for poor mental health to negatively impact your financial situation. A positive mental outlook is essential for effective debt management. On the other hand, poor mental health can ruin credit and drive individuals to file for bankruptcy.

Your mood and your ability to earn and manage money:

The Journal of the American Medical Association conducted a study that examined the strong link between depression and poverty. The study found that low-income people were far less likely to be able to manage depression, and far more likely to have suicidal thoughts. Ability to respond to counseling and medication therapies was lower among low-income individuals enrolled in the study.

These findings are hardly surprising. Because low-income individuals often live paycheck-to-paycheck, and debt management or credit score maintenance can become huge burdens on the psyche of an individual who is already struggling with depression. Not knowing how you’ll scrape together funds to make a payment on your housing – be it a rent or mortgage check – and not knowing where your next meal is coming from can contribute to a bleak outlook on life.

Long-term poverty and financial distress can indeed exacerbate depression — and worse, can make cures elusive. After all, if you barely have the funds to pay for your food and housing, how will you ever be able to afford counseling, medication, and other strategies for overcoming depression? It’s not easy, and at Advantage CCS, our hearts go out to those low-income individuals who are attempting to triumph over debt and triumph over mental illness at the same time. Individuals suffering from depression, bipolar disorder, or mixed-mood disorders who already experience financial distress can get themselves into further debt and other financial pickles (some even file for bankruptcy). This is because of the very symptoms of their illnesses prevent them from being fully able to practice debt management, credit score restoration, or smart housing budgeting.

The National Institute of Mental Health (NIMH) defines depression as a disorder interfering with daily life. The symptoms of depression include persistent low mood and noticeable changes in daily habits and functioning, including changes in appetite and sleep. Some affected individuals become unable to function in ways that are financially disastrous. For example, a depression sufferer might cut back on his or her work hours, or eventually, stop showing up to work altogether. Lack of stable income can easily lead to severe debt problems, credit issues, and eventually, housing foreclosure or a need to file for bankruptcy.

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A type of mental illness related to depression is called bipolar disorder. NIMH defines this as a mental illness with the primary symptoms comprised of noticeable shifts in moods. The two primary mood types are mania and depression. When depressed, a bipolar disorder patient might lack the energy to attend to necessary daily tasks. He or she might under-perform at work, resulting in loss of income or even termination. They might lack the energy or desire to pay gas, electric, and telephone bills, resulting in late fee accumulations and ruined credit scores.

The other hallmark mood state of bipolar disorder is called mania. When manic, a bipolar patient can become overwhelmed with a rush of energy and feelings. Patients describe this euphoria as pleasant – at first. Too soon, however, the consequences of a high mood can sink in. Some bipolar patients go on spending sprees when manic. Bills rack up, credit scores shoot down, and budgets are destroyed. Other bipolar patients work frenetically, chalking their increased productivity up to grandiose self-perceptions and heightened energy levels.

They might neglect their bills, or they might make costly mistakes at work. Substance abuse is common during manic phases as well, according to NIMH, and these substance abuses can eventually result in job loss or failure to focus on financial needs. Individuals with bad debt or ruined credit are more likely to suffer the symptoms of mental illness. Likewise, individuals with a predisposition to mental illness are more likely to suffer severe financial consequences.

Mental health, debt management, and bankruptcy prevention:

If you are severely depressed or suffer from bipolar disorder and are in need of debt management, housing counseling, or bankruptcy counseling, we applaud you for your courage to come forward and to admit to the need for help. We believe that the restoration of your daily functioning and your positive mood are imperative to sound credit and debt management.

First, understand that your illness isn’t your fault. You did not cause it, and you did not do anything to bring it upon yourself. It might help you to know that WebMD, and many other health information resources and management affiliates pinpoint biological (hereditary), situational, environmental, and psychological origins of mental illness. Therefore, before you jump-start a debt management plan or get yourself enrolled in housing counseling or bankruptcy counseling, it’s important that you get some “YOU” therapy. While money might be one factor in your mental illness, it is not the sole cause, and having more of it is not the sole solution. You need to work on your mental health first and foremost.

You might be struggling with your finances to such a degree that you might not be able to afford counseling or medication. You might lack health insurance, or you might not be able to take time off of work or household duties to seek help. If any of these situations are true for you, there are resources to which you can turn to for help. For example, there are specialized low-income counseling facilities in each city in America. Many charge for services rendered based on income sliding scales. This website lists some mental health treatment options for low-income or uninsured individuals: http://www.mentalhealthamerica.net/finding-therapy

Credit counseling, housing counseling, and mental health:

The next step you must take for effective debt management during a period of mental illness is to enroll in financial counseling. You might wish to begin with a simple online credit counseling session. Advantage CCS offers such counseling sessions for free — and we encourage you to enroll in an online credit counseling session as soon as you are ready. Your Advantage CCS certified credit counselor will review your budget and credit card information, and make recommendations to you based upon that information.

Other types of financial counseling can help you, as well. If you are thinking about buying a house, you should enroll in housing counseling; meanwhile, if you are having trouble paying for already-existing housing, reverse-mortgage counseling might be your best bet. Perhaps you are in need of a general debt management plan to coincide with your mental health treatment. You might be a good candidate for a debt management program if you find that you aren’t sure how to budget your monthly income against expenses, or if you are having difficulty making credit card, bill or loan payments on time.


If you are navigating the stormy waters of mental illness, you might find that your financial situation is so grim that you are considering filing for bankruptcy. Advantage CCS advises you that this should always be a last resort. Bankruptcy laws actually require that you enroll in bankruptcy counseling and demonstrate achievement in the form of a certificate of completion before filing. We offer bankruptcy counseling sessions and bankruptcy classes that are approved by the Executive Office of the United States Trustees (EOUST) as suitable for fulfilling pre-bankruptcy requirements for US residents.

Don’t despair if you have been diagnosed with a mental illness and are struggling with debt management such as credit card debt or housing debt. Take care of yourself first with mental health counseling services and medication (if needed); then turn to Advantage CCS for debt counseling, housing counseling, and bankruptcy help and advice.

Author: Lauralynn Mangis
Lauralynn is the Online Marketing Specialist for AdvantageCCS. She is married and has two young daughters. She enjoys writing, reading, hiking, cooking, video games, sewing, and gardening. Lauralynn has a degree in Multimedia Technologies from Pittsburgh Technical College.