Write Off Debt and Mental Health
Write Off Debt and Mental Health
Lending industry codes of the practice suggest creditors should consider writing off debt if:
- You are very unwell,
- You are unlikely to recover soon, and
- You have no way of repaying the debt.
If you feel this applies to your circumstances, you could request that your creditors write off the debt. Typically, you would do this in writing and send some medical evidence of your condition. You could ask your doctor, psychiatrist, or another health professional to assist you with your medical evidence. You should also send your budget sheet outlining your income & expenditure to show you cannot afford to pay your debts.
Some creditors may agree to write off the debt. However, others may not but could decide to mark your account as non-collectable, so they will not chase you to repay your debt while your circumstances remain the same. Some creditors won’t contact you if your debt is non-collectable; others will ask you often about your current financial situation.
Important points to consider:
- Creditors do not have to write off the debt.
- Creditors will want to see evidence of this – usually in the form of a budget sheet and medical evidence of any mental illnesses. Creditors may also ask for a Debt and Mental Health evidence form.
- Getting creditors to agree to write off debts can be a long process with no guarantee of success. Using another option, such as bankruptcy, debt relief order, or an individual voluntary arrangement (IVA) may take less time and effort bankruptcy, debt relief order or an individual voluntary arrangement (IVA).
- If a creditor confirms they will, it will still show on your credit reference file as unpaid. This could make it more difficult for you to get credit in the future.
The Debt and Mental Health Evidence Form (DMHEF) is standard.
It is used to ask health and social care professionals for evidence of your circumstances. It was designed to make it easier to collect this information for you and your creditors.
Once the form is completed, it can be photocopied and sent to all your creditors.
The DMHEF is usually given to you by a debt adviser or your creditors. You can get a copy from the people who designed it, the Money Advice Liaison Group (MALG), but MALG can’t help you with it or answer questions; they just helped create the form.
When writing your letter to request a write-off debt, including information about your circumstances, including:
- The period you have been unwell,
- The condition of your mental health was like when you took out the agreement,
- Outline any changes of circumstances that have negatively impacted your ability to repay (e.g., having less money coming in, working fewer hours, leaving your job, becoming unwell recently),
- Explain how your debts affect your mental health
- Provide information on any recent hospital stays.
Below is a sample letter you can use to ask to write off debt:
You can use this letter to send to a creditor or debt collection agency to ask them to write off the debt.
[Account/card / loan reference number]
I am writing about the above account. I currently owe XXX (insert debt amount here).
I am sending a copy of a recent personal budget sheet which shows that I cannot offer any payments. I also enclose (a letter from inserts name and profession of the health or social care professional who has provided evidence/a Debt & Mental Health Evidence Form) which describes my mental illness and how this affects my ability to manage my finances.
Unfortunately, my financial circumstances are unlikely to change due to my health issues. I cannot make an offer of repayment towards my debt, so I ask that you kindly consider writing this debt off or mark it as uncollectible, depending on your internal policy.
When considering my request, I would also like you to view the following information (insert information here about your mental health condition and how having the debt impacts you).
If you decide it is inappropriate to write off debt, I would like you to explain in writing how you have decided.
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Which Debt Plans apply to you?
We assess your circumstances based on your individual circumstances and will assess for all available debt advice solutions.
Please find below a list of debt solutions we will evaluate for:
- Debt Management Plan (DMP) – Information on a debt management plan
- Individual Voluntary Arrangement (IVA) – Information on an IVA
- Debt Relief Order (DRO) – information on a DRO
- Bankruptcy – information on Bankruptcy
If you have used our online application form, we will contact you to run through your income and outgoings and discuss your options so you can make an informed choice. At Debt Support Direct, we offer all statutory debt solutions in England, Scotland, Wales, and Northern Ireland so that you can choose the debt solution tailored to you and your circumstances.
If you have an attachment of benefits and have chosen the debt solution that you feel is the most appropriate, there will be some paperwork to fill in to put the debt solution programme in place.
Our debt advice is free, non-judgmental, and friendly, so if you are struggling with debt, speak to one of our experienced debt experts for a confidential chat on 0161 549 9848.
Free and impartial money advice is available from the Money Helper, an organisation set up by the Government for people in debt.
Debt Support Direct does not administer any debt solutions; we will assess your debts, circumstances and affordability and signpost you to an organisation or charity that can set up and help the debt plan you decide suits your circumstances.
All debt solutions should be very carefully considered. Some providers may charge fees if a solution is taken; if applicable, these will be outlined during your consultation.
Your ability to obtain further credit in the short term will likely be affected, which may also be the case over the medium to long term. Calls from mobile phones and other networks may be charged to our free phone number.
The Financial Conduct Authority regulates Ruby Holdings Limited, trading as Debt Support Direct. We can offer debt advice for both formal and informal solutions. All debt solutions must be carefully considered, and you must take independent advice.
There are sources of free debt advice and services. You can find out more by contacting the Money Helper on 0800 138 7777 or visiting moneyhelper.org.uk
Here are some links to UK debt charities that can provide help and advice on managing debt:
Please carefully read the information on these websites to understand what services they offer and if they would fit your needs. Reaching out for help as soon as you start having difficulties managing your debts is important. These organisations can help you understand your options and work with you to develop a plan to get back on track.