Other effects of debt
Financial problems have been linked to a number of negative effects beyond legal consequences. This chapter will explain how debt may affect a debtor's health and emotional wellbeing and the people around them.
Personal impact
Stress is a common response to financial pressure. Physical signs of stress include headaches, muscle tension, fatigue, insomnia and low immunity. Emotional signs such as anxiety, depression and lack of concentration can occur when a debtor feels that he or she lacks control of their finances.
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Depression and low self-esteem can lead to other negative behaviour such as alcoholism or drug taking, which can exacerbate the situation and spawn new problems. In this state, debtors may lose the ability to make rational decisions and their productivity at work may suffer as a result.
Some individuals start gambling to try to win the amount they need to escape debt, believing that winning will solve their problems. Unfortunately, problem gambling creates more financial problems than it solves and often worsens the effect of existing money troubles.
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In extreme cases, debtors resort to self-harm or even suicide to relieve financial pressures. This occurs when they believe there is no other way out; they hope that self-harm will win sympathy from creditors, while death represents a permanent escape from their situation.
Interpersonal relationships
Debt may also directly or indirectly affect a debtor's family, friends or co-workers. The most common way that debt affects interpersonal relationships is in the breakdown of the family unit, from arguments about money to physical or emotional abuse. A debtor may feel the need to use violence to take control of something or someone to make up for the lack of control they feel with regard to their finances.
If the debtor has dependents such as a spouse or children, then they will directly suffer the financial effects of debt. This may include a decreased standard of living or even poverty. The debtor's behaviour could also influence the way his or her dependents react to the problems and cause psychological distress.
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Depending on the extent of the debtor's external conduct, friendships and work relationships may also suffer. Debtors may feel judged by others or, due to focus on their financial situation, their distracted behaviour could affect the quality of their social interactions.
Restrictions
Debtors could feel socially restricted because they cannot afford things that they want, a form of indirect peer pressure. This in turn could affect their social standing, which may also be linked to their sense of self-worth leading to the emotional problems outlined above.
A negative credit rating associated with debt may lead to future financial restrictions when the debtor cannot obtain credit. Their inability to borrow could also lead to the aforementioned social problems.
Support groups
There are a number of support groups that help alleviate the problems associated with financial stress. Usually run by government or charity organisations, these groups provide a range of services, from counselling to legal advice.
