Debt, the final straw

Stock image courtesy of Pixabay

Financial Counsellors across Australia witness daily the mental health impacts that unmanageable debt can have on their clients. What happens when your client has already suffered a traumatic event and the financial stress becomes the straw that breaks the camel’s back?

ICAN Senior Financial Counsellor, Jon O’Mally, highlights that this financial stress can be intensified by pre-existing mental health conditions like depression and post-traumatic stress. “Financial counsellors need to be hyper-vigilant in these situations, said Mr. O’Mally. It’s really about ensuring you are improving your client’s situation, whilst protecting yourself from potential vicarious trauma.”

The Blue Knot Foundation website says that the greater the exposure to traumatic material, the greater the risk of vicarious trauma. People who work in services to which people with traumatic histories present seeking help, or who work with traumatic material are at particular risk. 

“The responsibility you feel when assisting people that have discussed suicide or traumatic events, can make you feel like you’re literally dealing with a life and death situation, said Jon. This can add a significant amount of pressure to get a good outcome for your client. Multiply this by an ever increasing case load; that’s when burn-out, compassion fatigue or vicarious trauma can set in.”   

ICAN CEO, Aaron Davis, said, “mental health first aid and trauma informed training needs to become a regular professional development activity for all of our financial counselling and capability workers. We all have a responsibility to identify and address mental health issues as they present themselves. A significant percentage of the people we assist have either been traumatised by active military service, natural disasters, domestic violence or childhood events.”     

Fifteen months ago Steven presented to ICAN with a $251,000.00 debt that had become unmanageable. Steven suffered from, at that stage, undiagnosed Post-Traumatic Stress Disorder (PTSD) and a severe bipolar type one mental Illness as a result of active service in the military. A relationship breakdown had put Steven into a position where he was no longer able to meet his financial commitments, leading to what felt like harassment from his creditors.

“I remember; I was that stressed, I was barely functional and really couldn’t see a future, said Steven. I was completely scared and embarrassed to initially come see ICAN’s financial counselling service.” Steven wanted to declare bankruptcy, however ICAN’s Senior Financial Counsellor, Jon O’Mally, wanted to explore other options with Steven, that would have less of a long-term emotional impact. 

“By actively listening in the initial intake process, I was able to identify that Steven was suffering from mental illness, said Jon. Before we could properly address his financial problems we needed to work on his mental health. We discussed seeing his GP and getting a referral to appropriate mental health services.”

“That conversation gave me the confidence to seek medical help and I now have medication to treat my condition, said Steven. Dealing with my overall stress levels put me in a way better position to address my financial problems.”

Jon and Steven explored the possibility of getting support from his doctor when presenting a debt waiver case to his creditors. “Steven’s doctor’s diagnosis has been invaluable in the credit waiver process, said Jon. She’s supplied letters confirming Steven’s diagnosis and symptoms. An added reason to prioritise a client’s mental health.” 

ANZ, NAB and Lion Finance have waivered a total of $43,000.00, as a direct result of Jon’s, financial counselling process. “The remaining $208,000 mortgage shortfall is still in play, however the other waivers have set a precedent through their acknowledgment of the issues presented, said Jon. What’s more important though, is that Steven is in a much better place.”

“I’m able to cope with things much better now, I can see a future for myself, said Steven. Seeing ICAN was the best thing I could have done, I wouldn’t have done this by myself.”