Debt from Disability

Specialist Debt Support Information

The UK Insolvency Debt Advice Service receive thousands of calls each year from disabled people with problem debts. The debt advisers understand the needs of people with debt problems are a combination of circumstances, often directly associated with disability and in relation to having a low income.

This specialist debt Support Information page has been published to specifically deal with debt and disability on a variety of money, debt and credit problems. Lack of income intensifies disabled people's vulnerability to debt and restricts their access to essential services.

More information

1. Debt from disability Information
2. Diversity of advice for debt from disability
3. Common Reasons for debt from disability
4. The links between debt and disability
5. Debt and Disability - The employment market and job options for those with disability
6. Benefits for the disabled with debts
7. Deferring payments on debt the disabled with debts
8. Debt from Disability -  The Impact on carers
9. Debt from disability - Mental health issues 
10. Debt from disability - Difficulty accessing decent debt advice
11. The response of creditors to clients with debts from disability
12. Common questions arising from debt from disability

'Debt from Disability' Information

The UK Insolvency debt advice service is pleased to use advisers to help disabled people and take account of the differing needs of people with different impairments. This debt advisers have experience in the the causes of debt within the households of a wide range of disabled people. The advice team are able to provide clients with disabilities advice on living with debt, dealing with creditors and generally solving their debts.

Financial difficulty has long been highlighted as a feature of the lives of disabled people. The specific consequences for disabled people with debt worries is that their problems will tend to remain hidden unless they are given a channel to deal with their problems. For this reason we are pleased that the new debt from disability team is available for callers 24 hours a day.

The debt and disability information intends to deliver a strong and reliable for clients with specific and distinct needs. The money advisers understand the following:

1. The factors leading to debt,
2. The experience of living with debt and the best procedures to resolve it can be different, for example, for people with mental health problems and people with physical impairments.
3. An understanding of these distinct circumstances underpins the provision of services which are genuinely attractive, relevant and accessible to the needs of all disabled people.
4. Disabled people were often wary of discussing their debt problems with representatives from voluntary organisations or professionals providing statutory services.
5. People providing services to disabled people were not necessarily familiar with disability benefits or with the existence of debt  advice services.
6. Amongst some of the voluntary organisations in touch with disabled people there was evidence of a reluctance to accept that disabled people are vulnerable to debt problems.
7. Those interviewees who had received advice about their current debt problems invariably described this help as creating a turning point in their lives, reversing a downward spiral of despair and deprivation.

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Diversity of advice for debt from disability

Disability in the UK is varied with different circumstances such as:

• People with physical impairments will suffer from debt from their disability
• Clients with mental health problems indicate that they have debt from their disability
• There are a wide variety of learning difficulties that people suffer from that may cause debt from their disability
• There are a wide variety of sensory impairments that people suffer from that may cause debt from their disability

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Common Reasons for debt from disability

Debt and disability information has identified the most common situations that can lead to debt problems for disabled people and their carers such as the following:-

• Due to a sudden drop in income.
• Financial concerns tend to be neglected at times of personal crisis. 
• Resolving debt problems can be more difficult with clients with deteriorating mental and physical health due to the process of dealing with debt.
• Some clients get into debt because they have to cut back on expenditure related to their disability such as:-
• Debt from disability from the cost of respite care
• Debt from disability transport costs
• The use of special food for special diets can be expensive and lead to debt.
• Making debt repayments drastically reduces disposable income.
• Cost of carers.
• Carers also cut back on their own quality of life in order to help meet the needs of the disabled person. 
• Financial concerns are often overlooked and benefits can go unclaimed.

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The links between debt from disability

Many callers with financial difficulties are disabled people and carers of disabled people with low income and poverty. The debt and disability advice team often find that factors associated with disability have played a crucial role in creating debt problems such as:-

1. Debt was usually the result of a combination of circumstances.
2. Sometimes debt resulted from the difficulty of meeting expenses associated with disability
3. Debt from disability is started by moving to accessible accommodation
4. Debt from disability can begin by the costs of altering existing accommodation.
5. Recurrent high expenditure on specific items
6. Lack or no assistance from the benefits system can cause debt from disability
7. Debt from disability can begin by the frequent need to replace essential furniture.
8. Debt can being by bearing the costs of damaged household items as a direct consequence of a child's behavioral problems,
9. Debt can arise from the need for those unable to use public transport so having to travel regularly by taxi to hospital
10. Debts can increase by the need to meet high fuel bills and telephone costs of dealing with disability.
11. Debt  sometimes occurs at the onset of disability or chronic illness
12. The costs of a person first taking on responsibility for the care of a disabled person will experience a significant difference between their old salaries compared to other income available from benefits.

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Debt from Disability - The employment market and job options for those with disability

Debt problems can rapidly accumulate during the process of adjusting to the onset of disability or illness for many disabled people. Even if clients find employment, even a small change in income or an additional demand on income could trigger debt problems. Unfortunately being disabled can exclude some from getting a job. Although there are strict employment laws in the UK disabled people often get into because they are unable to seek work or work normal hours.

Sometimes debts can occur following a change in income, such as the loss of a benefit or partner's earnings. For disabled people with a long-term dependence on benefits, debts are difficult to resolve and tend to remain or reoccur. Being in receipt of disability Living Allowance (DLA) does not necessarily mean that additional goods and services are affordable. Often client's entire benefits are used to repay debts or meet general household bills.

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Benefits for the disabled with debts

The problem in the UK is that in some disabled people with debts do not even qualify for any DLA. If you are still having some treatment for your disability you can contact your hospital or community social worker. If your treatment has ended contact your local social services department and ask to see a social worker. They will be able to assess your situation and advise you and your family about any benefits that you can claim, and can help you to claim them or claim them on your behalf. They can also advise you about schemes which allow you to work part-time while still qualifying for benefits, e.g. the Therapeutic Earnings Rule and Disability Working Allowance.

Your social worker, social security office or Citizens Advice Bureau can also help you deal with debts, and will know about any special funds available for people in your situation and also help to ensure clients do not miss out on their entitlements.

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Deferring payments on debt the disabled with debts

You may need help in deferring unavoidable bills and charges such as your rent or mortgage, council tax and heating bills. If you are having difficulty, or think that you may have problems in meeting monthly mortgage repayments, it is a good idea to contact the manager of the bank or building society that arranged the mortgage to explain your situation.

Building societies are sometimes prepared to suspend payments for a few months (especially when your case is explained in a report from a social worker). This gives you a chance to sort out your finances.

It may be possible to extend the term of the mortgage so there is less to pay each month, or you may be able to make interest-only payments, which will reduce the monthly payment. Help with the interest on your mortgage may be available from the Department of Social Security.

You can speak to your local council office about deferring council tax payments and can contact providers of services such as water, gas, electricity and telephones if you have difficulty in meeting payments for these services.

There may also be a neighborhood Law Centre in your area which can advise you if you have problems with repayments. For more information on your nearest law centre, contact the Law Centres Federation.

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Debt from Disability - The Impact on carers

Caring for a disabled person can be physically and emotionally demanding, particularly in the absence of support or respite care. The opportunities for carers to resolve debt problems by taking up employment are severely limited because of the absence of appropriate or affordable alternative care or support for the disabled person.

In some households the loss of a carer's earned income, because that person had left work to provide full-time care, had been a primary cause of debt. In turn, this debt had implications for the quality of life of the disabled person for whom they cared.

The income from benefits available to a disabled person is often a significant component in determining the standard of living of their family. If the disabled person dies or leaves the family home, the consequent loss of benefits can itself cause or exacerbate debt problems, with implications for all family members.

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Debt from disability - Mental health issues 

Clients often feel the onset of mental health problems, such as depression or anxiety begins the process of debt and disability.  Some clients with pre-existing mental health problems find that the stress of coping with debts often has serious consequences. The response of an unsympathetic or harassing creditor, for example, can take heavy toll on some people's health. The horrific truth is that there many callers to the helpline that have spoken of contemplating taking their own lives.

Some people's physical health problems have been adversely affected by the anxiety associated with debt such as other illnesses. Deteriorating mental health makes the prospect of resolving debt through employment less likely and often make taking other small practical steps to resolve debt problems more difficult.

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Debt from disability - Difficulty accessing decent debt advice

Some of the disabled people and carers that call The UK Insolvency Debt Advice Service  face a range of difficulties in seeking and obtaining independent debt advice. These included some of the following problems:

• People with debt and disability worry that their independence and control over money might be lost if they seek professional money advice.
• Clients with debt and disability worry that prejudicial judgments would be made about their debt problems.
• The public sometimes feel that debt advice for the disabled is inaccessible.
• Some callers were are surprised that is was available.

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The response of creditors to clients with debts from disability

Harassment by a creditor, such as constant telephoning, is detrimental to the well-being of disabled people and to the efficient recovery of debt.  Sometimes the debt repayment methods offered by a creditor are unsuitable for people with a particular impairment. Inaccessible buildings and a failure to provide appropriate means of communication also hindered negotiations with creditors.

The ways in which creditors help people in debt has an important effect not only for their state of mind and well-being but also for their ability to resolve a debt problem.

Banks, credit & store card providers, debt and loan companies develop should have a deeper understanding of the financial and personal circumstances variously facing people with physical impairments, learning difficulties, mental health problems and sensory impairments.

The feedback that we get from clients with debt and disability is that creditors failed to apply understanding, discretion or flexibility in their strategies to recover debt.  We therefore request that creditors acknowledge the implications for financial circumstances of the range of demands on disabled people's income and the difficulties which can arise in the period immediately following the onset of disabilty.

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Common questions arising from debt from disability are the following:

• Long and short term credit - how can debt from disability affect my credit rating?
• How do I prevent debt after disability from affecting my dependants?
• I don't want to become bankrupt. Can I prevent debt from disability causing this?
• If I consolidate my debt from disability, would that be a wise move?
• Now that we have the person has died, how do we share the debt from disability and sort out the bank accounts?

Please note if you are unsure of a debt situation in any other special situation and you are unsure if you are responsible for debt after disability please call 0800 074 6918. We money, debt and credit advisors ready to provide advice on responsibility for debts after disability.

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