Industry guidelines and codes of practice say creditors should consider writing off your debt if you are:
- very unwell,
- unlikely to recover in the near future, and
- have no way of repaying the debt.
If you feel that this applies to you, you could ask your creditors to write off your debt. You should do this in writing and send some medical evidence of your condition. You could ask your GP, psychiatrist or other health professional to help with medical evidence. You should also send your budget sheet that shows you cannot afford to pay your debts.
You could ask your GP, psychiatrist or other health professional to help with medical evidence. You should also send your budget sheet that shows you cannot afford to pay your debts.
When you write a letter to request a write off, try to include information about your situation. This information should include:
- How long you have been unwell,
- What your mental health was like when you took out the agreement, (if due to your mental health you did not have capacity to understand or make a decision about the agreement at the time you signed it, under Scottish law the agreement will be void and you can apply to have the agreement cancelled),
- Recent changes of circumstances that have affected your ability to repay (for example, having less money coming in, working fewer hours or leaving your job, becoming unwell recently),
- How your debts affect your mental health, details of any recent hospital stays.
Some creditors may agree to write debts off. Others will not, but may agree to mark your debt as ‘uncollectable’. This means they will not chase you to repay your debt while your situation stays the same. Some creditors won’t contact you at all if your debt is uncollectable while others will contact you every so often to ask about your current financial situation.
Important points to remember about requesting a write off
- Creditors do not have to write debts off.
- Creditors will want to see evidence of this (usually in the form of a budget sheet and medical evidence of any mental illnesses).
- Getting creditors to agree to write off debts can be a long process with no guarantee of success. It may take less time and effort to use another option such as bankruptcy or a debt relief order.
- If a creditor writes a debt off, it will still show on your credit reference file as unpaid. This could make it more difficult for you to get credit in the future
Debt & Mental Health Evidence Form
The Debt and Mental Health Evidence Form (DMHEF) is a standard form.
It is used to ask health and social care professionals for evidence of your circumstances. It was designed to make it easier to collect this information for you and your creditors.
Once the form is completed, it can be photocopied and sent to all your creditors.
The DMHEF is usually given to you by a debt adviser or your creditors. You can get a copy from the people who designed it, the Money Advice Liaison Group (MALG), but MALG can't help you with it or answer questions, they just helped design the form.
- Priority and non-priority debts
- Bank accounts and debt
- Drawing up a budget sheet
- Negotiating reduced payments to your debts
- Free Debt Management Plans
- Debt Arrangement Scheme
- Trust Deeds
- Formal bankruptcy or a ‘sequestration’
- Write Offs
- Will I be 'blacklisted'?
- What can creditors do if I don't pay?
- Should I tell creditors about my mental health?
- Getting help from a specialist adviser
- What to know about loan sharks
- Next steps