The Mental Load of Debt

The Mental Load of Debt

May is Mental Health Awareness Month in Canada. Given the impact financial strain has on mental health, we’re taking this opportunity to offer solutions to those in Southern Alberta for overwhelming debt, in the hope that this advice can help people figure out how to reduce the toll that debt problems may be taking.

You may not be aware of the toll that financial problems have on your health, but we see the impact every day. 

Here are some ways that debt can affect mental health:

  1. Stress and anxiety:

Debt-related stress can lead to higher levels of stress. A study by Sweet et al. (2013) found that higher debt levels were associated with increased symptoms of anxiety and depression among young adults.1 

  1. Feelings of self-worth:

Debt tends to lead to feelings of failure, shame, and inadequacy. A study by Drentea and Lavrakas (2000) found that higher levels of debt were associated with lower self-esteem.2 

  1. Relationship impacts:

Debt-related stress can negatively impact relationships. A survey conducted by the National Endowment for Financial Education (NEFE) found that financial issues, including debt, are a leading cause of relationship stress and conflict.3 

  1. General mental well-being:

A systematic review by Meltzer et al. (2011) found that individuals in debt were more likely to experience symptoms of common mental health disorders.4 

Addressing these sorts of mental health issues isn’t simple, but there are some things you can do about it:

  1. Consult a professional.

According to the Canadian Mental Health Association, one of the top recommendations for dealing with stress is talking about your problems. Find a licensed professional at or for more immediate support try

  1. Take action

Another top recommendation from the Canadian Mental Health Association is to take steps to resolve the issue causing you stress.  You’ve likely already tried to fix your financial issues on your own, so if it’s time to reach out for help you can try:

  • Getting support from a qualified and licensed not-for profit credit counselling service, like Momentum.
  • See a Licensed Insolvency Trustee for advice about options for dealing with your debt.

Getting help is key, but it's important to work with qualified individuals. People who are under stress are often a target for scammers or people who would take advantage of you for their gain. Even well-meaning people can cause more harm than good if they aren’t an expert in the field. Starting with a government agency like the Office of the Superintendent of Bankruptcy can be a good start if you’re not sure what your best options are for getting support.

  1. Take care of you

Often, we put off doing things we know or suspect might help ourselves because we are focused on taking care of others or juggling too many responsibilities. However, you will be in the best shape to do those things if you are doing well yourself.

Make it a priority to take steps right now to get your situation under control. The earlier you do this, the more viable options you will have. This is particularly true when it comes to managing debt problems.

  1. Develop a plan

Researchers from the Peking University HSBC Business School, the Korea University Business School, and the University of Iowa found that that envisioning the steps necessary to complete a goal reduces anxiety, increases confidence, and leads to more effortful actions.5 

With the help of the right professionals, there is almost always a viable path to relieve yourself of the debt problems that are causing you stress. Without a plan, the problems tend to feel overwhelming. But once you know what you need to do, even if it is something you’ve been dreading (like the worst case of bankruptcy which, by the way, can usually be avoided), you’ll likely experience a release of the weight of fear you’ve been carrying which allows you to get on with the plan and get the problem solved.

Charla Smith & Company is a Calgary-based Licensed Insolvency Trustee, serving the southern Alberta region. We regularly help individuals  review their financial situation and consider options for dealing with overwhelming debt. If you'd like a free consultation, please reach out to 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.

1 [Source: Sweet, E., Nandi, A., Adam, E. K., & McDade, T. W. (2013). The high price of debt: Household financial debt and its impact on mental and physical health. Social Science & Medicine, 91, 94-100.]
2 [Source: Drentea, P., & Lavrakas, P. J. (2000). Over the limit: The association among health, race, and debt. Social Science & Medicine, 50(4), 517-529.]
3 [Source: National Endowment for Financial Education. (2017). NEFE survey: Financial infidelity on the rise in the digital age. Retrieved from]
4 [Source: Meltzer, H., Bebbington, P., Brugha, T., Farrell, M., & Jenkins, R. (2011). The relationship between personal debt and specific common mental disorders. European Journal of Public Health, 23(1), 108-113.]
5 (Jooyoung, P., Lu, F., Hedgcock, W. (2017). Forward and Backward Planning and Goal Pursuit. Psychological Science. DOI:10.1177/0956797617715510)

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Frequently Asked Questions

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?

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.

A Licensed Insolvency Trustee is your best resource to discuss whether a Consumer Proposal is right for you. For general information on Consumer Proposals, check out our Consumer Proposal page. However, the best way to find out what a Consumer Proposal would look like for you is to book a free consultation with a LIT.

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.

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.

Typically the only impact on your spouse occurs if they have co-signed any of your debt. In that case, if you are not able to pay the debt your spouse may become fully responsible for it. Often, people bring their spouse along to our consultation meetings, in which case we are able to discuss their situation as well, and the impact your options might have on them. Contact us to set up a meeting.

Nothing. We offer free consultations to anyone looking to review their options for dealing with their debt. If we decide together that one of the services we provide is the right option for you, there will be payments you need to make in connection with that, but that will occur only after you have made a decision and signed the formal documents.

If you are struggling with debt, there are several signs you might be heading for the sweatbox or, worse, already there. If you’re not sure, check out our blog 5 Signs You’re Already in the Financial Sweatbox or contact us to discuss our debt.

There are several factors which must be considered to determine which options are feasible for you and to select the best one, including:

  • What assets do you own?
  • Who do you owe money to and how much?
  • What sort of income are you bringing in and how predictable is it?
  • What is your family situation?
  • Your personal goals and priorities

Check out our Consumer Proposal and Bankruptcy pages for information about each of these options and their pros and cons. For more indepth information about these and other options, we've provided a plethora of information on our blog

For a fulsome review of your situation and advice about which option is best for your specific circumstances, contact a Licensed Insolvency Trustee for a free no-committment assessment.

Sometimes, the best way to improve your score is to truly fix the underlying issues causing you to overuse or default on credit. A Licensed Insolvency Trustee (LIT) can review options for resolving those issues so that you can stop the cycle of debt. AnLIT can also provide referrals to trusted individuals who can help where we can't. Book a free consultation to find out more.

There are many people who sell advice and/or help with credit ratings, or give advice online, but proceed with caution. Some are more knowledgeable and reputable than others, so you'll need to do your research. There is no magic pill to increase your credit rating, so be cautious about paying anyone who says there is. If you’d like to get in touch with an expert who deals specifically with issues on credit reports, you can contact Richard Moxley at The Credit Game or take a look at the resources he has made available on his website.


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.

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