How Debt Problems Can Affect Your Health

How Debt Problems Can Affect Your Health

One of the hardest things about being a Licensed Insolvency Trustee (LIT) is seeing people wait too long to get help with their debt. Unfortunately, most people either don’t know about the assistance an LIT can provide, or they avoid reaching out due to embarrassment about their situation. Sometimes, this delay results in the individual having fewer options to deal with their debt because:

  • their credit rating has deteriorated
  • their debt has ballooned
  • their assets have been depleted
  • they’ve fallen victim to predatory lenders, or
  • they’ve tapped out family support.

Whether or not these things have happened, one thing is for sure: when you delay getting help with debt you struggle for longer than necessary. This state of struggle sometimes referred to as the “sweatbox” (see our blog), is no fun. And it often affects more than just your finances. It can also affect your health.

It Creates A Lot Of Stress

According to research done in 2018, 50% of Canadians agreed that their level of debt is causing them stress1. This has likely only increased as a result of recent economic pressures like the COVD-19 pandemic and runaway inflation. In fact, a recent study indicated debt that is caused by traumatic events or taken on out of need is particularly stress-inducing2.

Struggling every day to make ends meet or facing pressure from debt collectors is certainly stressful, but it’s not just the direct financial stressors that impact individuals. According to the Mayo Clinic3, common effects of stress include:

  • lack of focus and motivation
  • fatigue and sleep problems
  • irritability, and anger

It is easy to see how these effects of stress can strain relationships, impact your ability to perform at work, and affect your health, causing even more stress.

1    (Ipsos, 2018).
2    Song H, Wang R, Bishwajit G, Xiong J, Feng Z, Fu H. Household debt, hypertension and depressive symptoms for older adults. Int J Geriatr Psychiatry. 2020;35(7):779-784. doi:10.1002/gps.5302

It Can Contribute To Or Exacerbate Health Conditions

Not only does the stress caused by debt directly impact an individual’s mental health, but health professionals have also acknowledged that chronic stress can suppress the immune system4, making you more likely to get sick.

And there are other ways that financial problems can impact your health:

  • When trying to pay debt, people often avoid or delay spending on things they need in order to meet minimum payments or satisfy debt collectors. This can include things like delaying or going without things like dental care, medication, and healthy food.
  • Individuals struggling with debt often try to “work their way out” of the problem by taking on more hours or clients or working a second job, hoping that by earning more revenue they can pay off the debt. It's a good strategy, but if they don’t make enough extra income (net of related expenses like taxes) to pay off the debt, they can end up reaching an unhealthy level of mental and physical exhaustion or causing injuries. We see this a lot in older individuals who work in a physical job; a person’s body can only take so much.

Eventual outcomes from ignoring your physical needs can range from increased costs to deal with problems when they become unavoidable, to causing or exacerbating physical or mental health conditions.  

All that being the case, perhaps it isn’t surprising that a study5 conducted by a trio of researchers in the United States concluded that accumulation of unsecured debt can have important health implications and may exacerbate midlife health issues. This doesn’t just affect older individuals. A study from Northwestern University6 found that adults ages 24 to 32 who were insolvent reported poorer health in general. They also had significantly higher blood pressure, a risk factor for heart disease and stroke.

5    Trajectories of unsecured debt and health at midlife -  Adrianne Frecha, Jason Houleb, DmitryTuminc
6    The high price of debt: Household financial debt and its impact on mental and physical health Elizabeth Sweet, Arijit Nandi, Emma K. Adam, Thomas W. McDade

Taking Action To Deal With Debt Can Help

Based on the above, it should come as no surprise that many of the people who come to us for help with their debt are dealing concurrently with major health issues. Sometimes, the health issues caused the debt problem. Sometimes, the debt problem appears to have caused the health issue. In most cases, however, it isn’t clear which came first.

Solving your debt problems won’t automatically fix health problems, but dealing with your debt may put you in a better position to get your mental and physical health under control. According to the Canadian Mental Health Association7, the top recommendations for dealing with stress involve:

  • talking about your problems, and
  • taking steps to resolve the issue.

In fact, there is evidence8 that when debt is decreased, there is a corresponding reduction in mental health symptoms.

If you aren’t sure if you should be seeking help with your debt, consider whether you are experiencing any of the above issues. Or, check out our previous blog 5 Signs You’re Already in the Financial Sweatbox.

If you decide to seek help, tread carefully. CPA Canada has warned9 that “because many people are so afraid to ask for help until they’re drowning in debt, they may respond to ads for companies claiming to assist, but that actually are unqualified as financial advisers or are receiving kickbacks.” When that happens, the cycle of debt and stress can get worse. An LIT is an educated, licensed and regulated professional that can help you get a better understanding of your options and can refer you to other resources to help with underlying problems that may be impacting your debt. Even if you already have a plan to deal with your debt, a conversation with an LIT may still be a good idea, as we can help you make sure the option you are considering will actually fix the problem and tell you about other options you may not have thought of. These conversations are free and confidential, so there is no risk to booking a consultation.

8    Amit N, Ismail R, Zumrah AR, et al. Relationship between debt and depression, anxiety, stress, or suicide ideation in Asia: a systematic review. Front Psychol. 2020;11:1336. doi:10.3389/fpsyg.2020.01336

Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee, serving the southern Alberta region. We regularly help individuals who are dealing with stress caused by their debt. If you would like a free, no-commitment consultation to review your options, contact us.

Disclaimer: This publication provides general information and should be seen as broad guidance only. The information contained herein cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon this information without obtaining specific professional advice relating to your particular circumstances. Charla Smith & Company Ltd. does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

Frequently Asked Questions

Although you've already been experiencing the effects of the Sweatbox, it is never too late to get relief from it. As we mentioned in the article, the longer a person stays in the sweatbox, the more likely that they might have to make an assignment in bankruptcy to get that relief, but that might not be the case for you. The best option for dealing with your debt is dependent on several factors. We can help you figure out what options you have based on a review of your situation. Contact us to find out what those options might look like for you.

Reach out to us. You can make an inquiry directly from our website by clicking here, or you can call or text us at 1-403-899-3890. We will respond quickly, and work with you to find a good time for the meeting.

When a business owner decides not to file bankruptcy but to instead just shut the business down, there are certain things that need to be done to shut it down cleanly: selling remaining assets, laying off employees, dealing with the landlord, communicating with creditors. It's understandable that this seems overwhelming after everything you've been through. This is where it can make sense to find a way to fund the cost of the bankruptcy or to cooperate with a secured creditor who might be considering appointing a receiver. Absent such a formal engagement, a Licensed Insolvency Trustee can give you referrals to others that might be able to help, such as an auctioneer that can deal with the assets or a lawyer that can help you manage responses to creditors. Contact us if you'd like to explore this option.

Not at all. Bankruptcy is one of the services we provide but it is not the best solution for everybody. In fact, more often than not we recommend a solution other than bankruptcy. A Licensed Insolvency Trustee is simply the best resource for reviewing your options, as we are highly trained, regulated by the government and our professional association, and well-versed in a variety of options. Contact us if you'd like to start a conversation about your options.

Absolutely. A Licensed Insolvency Trustee can talk to you about an array of options, including a Consumer Proposal. There may be some options that are not realistic for you, based on your situation. A Licensed Insolvency Trustee will meet with you and go over the options, helping you figure out which options are realistic for you and which one is the best to deal with your debt. Contact us to book a meeting to find out more.

Licensed Insolvency Trustees (or LITs) are the only people who can provide bankruptcy or Consumer Proposals as an option for dealing with your debt. They are uniquely qualified to provide these services and give you advice about your debt. For more information, see our blog post: What is a Licensed Insolvency Trustee?


With our experience and our caring approach, we will help you find the best option for debt relief based on your unique situation - from advice on talking to your creditors to a consumer proposal or bankruptcy, and everything in between. We are here to lift the burden caused by overwhelming debt. 

Contact us today at 1-403-899-3890‌ for a FREE, no-commitment meeting, and let us guide you to regaining your financial footing.

Or, join our Email List to receive notifications when we post new blogs or have news to share.

Submit Message