Laws around debt are out of date and in need of modernisation, argues Martin Lewis of MoneySavingExpert.com.
It's time to stop debt threats.
Far too many vulnerable people are at risk because of antiquated legislation that near-forces companies to bully them.
New authoritative figures show over 100,000 people in debt attempt suicide each year in England alone, and 420,000 consider it.
A new campaign by the charity The Money and Mental Health Policy Institute, which I am proud to have founded in 2016, and still chair, is campaigning to change the law.
It's not 'only money'
Finance is a wellbeing issue. Debt and mental health are a marriage made in hell.
You are four times more likely to be in debt crisis if you have a mental health problem than everyone else, and the recovery rate for people in debt receiving some type of mental health treatment is less than half of that for those who aren't in debt.
The new research we've done, based on analysis of the NHS's Adult Psychiatric Morbidity survey, reveals that 100,000 people in debt attempt suicide each year and those in debt are three times more likely to have considered suicide than others.
It's time to change this
Two of the changes Money and Mental Health is calling for are as follows.
• Debt threat letters need to stop
The Consumer Credit Act 1974 requires companies sending letters to people struggling to repay debts to include the following text in capitals or bolded up:
If you do not take the action required by this notice before the date shown then the further action set out below may be taken against you [or a surety]
Money and Mental Health is calling on the government to change these rules, to make letters easier to understand and signpost people to help. If you agree, sign the petition supporting this at www.moneyandmentalhealth.org/debt-threats
• Regulation of debt enforcers and bailiffs
If creditors can't get their money back, they often call on debt enforcers/bailiffs.
There is guidance on how they should behave, but they're not independently regulated. Reports of threatening and unlawful behaviour persist.
We need independent regulation of bailiffs by the Ministry of Justice to protect those in acute distress from aggressive collections.
If you or someone you know is struggling to cope with debt…
If you need help with suicidal thoughts, contact the Samaritans at any time on 116 123.
If you're worried you or someone else is in immediate danger, call 999 – ask to stay on the line while you wait for help to arrive.
1. Get free one-on-one help
I've been the Money Saving Expert for so many years now my hair is greying. Crucially, I've never come across any situation where the debt hasn't been solvable.
The best route is to get free one-on-one help from a non-profit debt agency such as www.citizensadvice.org, www.stepchange.org or www.nationaldebtline.org.
Contact www.capuk.org for emotional support as well as debt support.
All are there to help, not judge. Don't let fear or embarrassment stop you.
2. Know your bailiff rights
• They can't turn up at your door without sending a letter first.
• In most cases they can't force their way in. Once you know they're coming ensure you keep doors and windows locked.
If they turn up, stay calm and don't be intimidated. They may try and persuade you to let them – you don't have to.
Talk to them through the letterbox if needed. You can record everything in case they break rules.
• They rarely take goods the first time they come; they'll usually try and get you to make a payment towards what you owe.
• They should leave if you refuse to open the door. If they get aggressive, call 999.
• Bailiffs shouldn't lie about who they are, climb through windows, break down doors, push past you, or enter when there's only an under-16 in.
• If they are collecting unpaid court fines, or if you haven't paid what you agreed on the first visit they can use a locksmith for entry. They should show you a court warrant for this.
3. Sort through your finances
Get a trusted friend to help if you can't cope. They could open your mail from creditors to take the panic away, or speak to firms on your behalf.
If you're struggling to budget look for a bank account or an app that will let you split your money into separate 'piggybanks' (like www.monzo.com or www.squirrel.me), to help you stay inside your limits.
Check you're claiming all the benefits you're entitled to at www.mind.org.uk and www.entitledto.co.uk.
• Martin Lewis is the founder and chairman of Moneysavingexpert.com
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