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Can You Get Debt Written Off Due to Mental Health Illness? 2022

can you get debt written off due to mental illness uk

For free and impartial money advice and guidance, visit MoneyHelper, to help you make the most of your money.

Mental illness can significantly impact your ability to repay your loans.

If you’re here to learn more about how debt and mental health are linked, what issues you may face, and if you can get your loans written off because of mental illness, this guide is for you.

Let’s get right into it.

can you get debt written off due to mental illness

Debt & Mental Health – How Does Debt Affect Mental Health?

Debt may have severe health impacts on a person, and mental wellbeing is no exception.

When you’re missing payments, the idea of unpayable debt looming over your head can be overwhelming.

Several people in debt have reported that their mental health issues have worsened as a result of being in debt.

Being in debt can make a person feel worthless and inadequate, which is a big blow to one’s self-esteem.

Other than that, several people face constant anxiety, depression, and fear because they’re in debt.

The relationship between mental health and debt has been so commonly observed that a proper medical term, “debt stress”, has been coined to represent the debilitating mental impacts of debt.

Lastly, being in debt may add on to your health problems, causing a loss of focus, hypertension irritability, attention problems, and a host of other mental problems.

Can you Ask for Debt to be Written off due to Mental Illness?

In general, yes, it is possible to get your debt written off because of mental illness – but there are a few conditions you should be aware of and a few protocols you need to follow.

Let’s look at each of such cases in detail individually.

Convincing Creditors to Write Off Debt

If you think your mental illness is making it very difficult for you to deal with your debts, you may choose to contact your creditors and ask them to write off your debts.

Whether you want to inform creditors of your issues is entirely your choice, but if you do, it may end up helping you with your negotiations.

Your creditor may understand your situation and offer you a variety of options to help you deal with your situation. Them choosing to write off the entire debt, especially if it’s a big sum, is unlikely, but not impossible.

However, instead of entirely writing off your debts, creditors may choose to back off for a certain period, agree to:

  • not employ debt collectors
  • contact you only at specific times
  • give you extra time to deal with your situation
  • bring in specialists to deal with the situation.

Notice of Correction

If you’re struggling with your mental health illnesses, it may be a good idea to mention it in your credit report to inform potential lenders and creditors about the circumstances surrounding your debts.

A notice of correction is a passage that explains the reasons behind your credit rating or conveys any contextual information that you may want to include in your credit report.

So, for instance, if your poor credit rating has primarily been caused by your mental health illness, you might want to explain it on your credit report. 

That way, even if you have a bad credit score, creditors may understand your mental health as being the reason behind why you have a bad score and may offer financial alternatives and other arrangements to make debt easier for you.

Debt & Mental Health Evidence Form

This form helps your creditors make sense of any mental illnesses you may be dealing with.

Basically, it allows your creditor to receive information and updates about your mental illness from a health professional. This is done with your consent.

The form is a great way to let your creditors in on your situation.

Writing Off Debt Using Insolvency

Let’s talk about your insolvency options in the UK.

You can avail of debt relief orders, individual voluntary arrangements, and bankruptcy as legal options to get rid of your debt.

Let’s look at each of these options one by one:

Debt Relief Orders

A debt relief order, or DRO for short, is designed to give you a period where neither your creditors nor debt collectors can chase you around for debt.

The basic details of the arrangement are as follows: once approved, you are granted a full year’s worth of time where you can think and plan how to get back on your feet and pay your creditors back.

However, a DRO only applies to certain types of debt and may take quite a hit on your credit score.

Individual Voluntary Arrangement

An IVA, or individual voluntary agreement, allows you to pay your loans back in instalments over a specified period.

The allotted period for which an IVA is valid is around five to six years.

If you still haven’t managed to pay you loans back in time, everything you owe under the IVA is.

An IVA does have extremely strict conditions for qualification, though. The creditors that you owe 75% of your loans to all have to agree to the conditions of the IVA for it to be considered valid.

Other than that, an IVA can also badly affect your credit rating, so be prepared for such consequences.


Bankruptcy allows all your loans to be forgiven if you can prove that you don’t own the required assets to repay it.

Once you file for bankruptcy and it is approved, your assets are taken away and used to contribute towards the repayment of your loans.

Once your assets have been used to contribute to repayment, any amount you still owe is written off and you don’t have to worry about it anymore.

What Happens After a Loan is Written Off

After a loan is written off, the debtor originally responsible for repaying the loan is no longer required to repay it.

However, even though the debtor doesn’t have to repay the loan, they do usually have to pay taxes on the amount of the loan.

This is because once a loan is written off, it is technically listed as income from the creditor to the debtor, and the debtor is required to pay taxes on it as they would with other sources of income.


Will my creditors be more considerate if I shared my mental health issues?
Yes, it’s a possibility. Once you inform your creditors of your situation as honestly and clearly as you can, they may become willing to make specific concessions pertaining to your loans. Also, in some cases, when creditors realize that they’re most probably not getting repayments from you, they may even be willing to write off your loans.
How long before a loan becomes uncollectible in the UK?
For most types of loans, they become uncollectible six years after the point where your creditor last contacted you about the loan or six years from when you and your creditor last acknowledged the loan. For mortgage loans, however, the limitation period is twelve years after the point where your creditor last contacted you about the loan or twelve years from when you and your creditor last acknowledged the loan.
Can I ignore my debts?
No. I don’t recommend that you ignore your debts. If you keep ignoring them, they won’t just disappear. On the contrary, your interest will keep racking up and your credit score will take a hit when you miss your payments.
How far are debt collectors allowed to go?
Collectors may call you or confront you to ask you to pay your debts back. If they try to be coercive or threatening, you need to know how to avoid them. They’re not allowed to threaten to take you to court. If they try to do so, it’s considered a form of harassment under UK law.
Can creditors take money from my wages?
Yes. Creditors may attempt to take money from your wages to contribute to your payments via a court order. An order of this nature is referred to as an “attachment of earnings” order.
Can I go to prison for debt?
No. In the UK, you won’t be jailed for not having the money to pay back your debts. The only situation where you can potentially be jailed is if you’ve actively committed fraud in dealing with your debts.