Debt and your mental health

If debt is affecting your mental health, the most useful first step is often a small one: telling someone. That could be a free debt adviser, your GP or a helpline. You can also tell your creditors, ask them to pause while you get advice, and in Scotland you can apply for a moratorium that stops most enforcement action for 6 months.

What can you do first when debt feels like too much?

You do not have to fix everything at once. A few steps can take some of the pressure off:

• Pick a time to open post, or ask someone you trust to open it with you. Put anything from sheriff officers (the court officers who enforce debts in Scotland) or the court at the top of the pile, because those letters can have short deadlines, such as 14 days for a charge for payment.
• Deal with priority debts first. These are the bills with the most serious consequences, such as rent or mortgage, council tax and energy. Credit cards and loans come after them.
• Check you are getting everything you are entitled to. Council Tax Reduction can lower your bill, and a household member with a severe mental impairment can bring a council tax discount or exemption.
• Get free debt advice. An adviser can look at everything with you, contact creditors for you, and move at a pace that suits you. See free debt advice in Scotland.

You do not have to make any big decision about your debts while you are unwell.

Should you tell your creditors?

It is up to you, but it often helps. Lenders and debt collection firms regulated by the Financial Conduct Authority (FCA) must treat customers who are in arrears, or close to it, with forbearance and due consideration, and must take their individual circumstances into account. Firms should treat you as close to arrears as soon as you tell them you might miss a payment, so you do not have to wait until you fall behind.

The FCA’s rules give examples of what forbearance can mean:

• reducing, pausing or cancelling interest and charges
• accepting no payments, reduced payments or token payments for a reasonable time, if paying more would leave you unable to cover priority bills or essentials
• agreeing an affordable repayment plan over a reasonable time

Firms must also not pressure you to pay in unreasonably large amounts, or to sell your property or borrow money to pay them.

You could say something like: “I have a mental health condition that is affecting how I manage money. I am getting debt advice. Please note this on my account, give me some time, and contact me in writing.” You do not have to give details of your diagnosis.

These FCA rules cover lenders and debt collectors. Councils, landlords and energy suppliers work under different rules, but it is still worth telling them what is happening.

What is the Debt and Mental Health Evidence Form?

The Debt and Mental Health Evidence Form (DMHEF) is a short form that a creditor or debt adviser may ask for when they need evidence about your mental health to decide what to do about a debt. It was first launched in 2008 by the Money Advice Liaison Group (MALG), and the current version is hosted by the Money Advice Trust. It is used across the UK, including Scotland.

How it works:

• Only a health or social care professional can fill it in, such as a GP, nurse, social worker, psychiatrist, psychologist, occupational therapist or mental health therapist. You choose someone who knows you.
• Your consent is needed. You sign a consent form first, which the adviser or creditor should give you with instructions.
• The front asks them to confirm your condition and name it. The back is optional and can explain how it affects your ability to manage money.
• It goes to the creditor, who uses it with other information to decide what action to take.

The Money Advice Trust does not recommend using the form on your own. Many creditors will help once you tell them about your mental health, without a form. It encourages creditors to consider other evidence first, such as a copy of a prescription or a letter about your care. If you do need the form, a debt adviser can guide you through it.

How can you get breathing room from creditors?

There are two main kinds of pause, and they work very differently.

An informal pause while you get advice. FCA rules say a lender or debt collector must suspend active recovery for a reasonable period if you tell them that you, or an adviser, are working out a repayment plan. That should generally be 30 days, and they should consider a further 30 days if you are making progress. Tell each creditor, and keep a note of who you spoke to and when.

The moratorium on diligence. This is a legal protection. It gives you 6 months in which creditors cannot serve a charge for payment, start new enforcement such as arresting your bank account, or petition to make you bankrupt. It has limits: it does not freeze interest, an earnings arrestment already in place carries on, and you can only have one in any 12 months. You can apply yourself or through a money adviser, and you must tell your creditors, because the Accountant in Bankruptcy (AiB) will not. Read more about the Scottish moratorium on diligence.

Is there a Mental Health Moratorium?

Not yet. The Bankruptcy and Diligence (Scotland) Act 2024 allows Scottish Ministers to create a Mental Health Moratorium, which would pause debt recovery for people with serious mental health difficulties. The parts of the Act that would set it up are not in force, and as at September 2026 there is nothing you can apply for. The moratorium on diligence above is what is available now.

Where can you get support?

When you choose the mental health option on 111, you are put through to NHS 24’s Mental Health Hub, where trained practitioners can talk things through and connect you with other services. NHS 24 also runs Living Life, free phone and online support based on cognitive behavioural therapy (CBT). It is for people aged 16 and over who are registered with a GP in Scotland, have mild to moderate difficulties and are not already getting care from another mental health service.

Your GP is another good starting point, and can also be the person who completes a DMHEF if you need one.

If you are already in a debt solution and your health changes, tell your trustee or money adviser. Trust deed payments are reviewed at least once a year. A trustee can seek early discharge where illness or other circumstances outside your control mean you cannot keep going and there is no reasonable prospect of that changing. In the Debt Arrangement Scheme, a payment break of up to 6 months is possible if your disposable income falls by 50% or more. See if your circumstances change.

Official sources

• Money Advice Trust: Debt and Mental Health Evidence Form
• FCA Handbook: CONC 7.3, treatment of customers in default or arrears
• Accountant in Bankruptcy: moratorium on diligence
• NHS 24: mental health services at NHS 24
• Breathing Space