When debt becomes unmanageable, it can affect one’s mental health. Several studies done over the years have linked debt to mental health conditions. Financial health and mental health are directly and deeply intertwined. So, financial stress can lead to or exacerbate mental health issues.
Here is how this can happen:
Sleep deprivation
Debt often triggers the fight-or-flight response. How the brain responds to an immediate physical danger is nearly identical to how it responds to continuous worries about money.
When the body is flooded with stress hormones, such as cortisol and adrenaline, the stress response system is engaged. This can keep someone awake, as they constantly think about bills, mounting debts and endless phone calls from creditors.
Depression and anxiety
The constant worry about being unable to cover basic living expenses, the snowballing effect of interest, the actions of debt collectors and the impact of financial hardship on the future can lead to depression and anxiety.
One may feel hopeless, angry and afraid of the future. This can make it difficult for them to make better financial decisions. For instance, they may start ignoring bills and calls as a way to avoid stress or because they believe no action can make a meaningful difference. But unfortunately, this can worsen the situation.
Loneliness
It’s not uncommon for people under financial stress to withdraw from their loved ones. This can be because of stigma, shame, fear of judgment or the inability to afford social activities. Being alone when someone keeps receiving phone calls and bills they struggle to pay can negatively impact their mental health.
Debt can lead to a heavy psychological toll, which can eventually affect your physical health. Filing for bankruptcy legally stops creditors from pursuing you, which means no more endless calls and constant worrying about repossession. It allows you to eliminate or repay debts in a manner that protects your well-being.