What are the causes of Debt?

Debt is rarely as a result of one isolated cause, but more likely to be a process or cycle of debt during which the causes increase as does the amount of debt.

Debt leads to debt-stress or debt-anxiety, being worried about being in debt, the impact of debt on your life style, social impact, impact of family or pets etc. 0Debt.co.uk recognise the emotional and mental impact of debt on individuals and their families. 0Debt.co.uk is based on providing a compassionate, understanding and practical support.

Debt causes can be classified into the following broad areas:

Changing circumstances

Debt can arise as a direct result of changing circumstances, for example bereavement or illness that led to unemployment resulted in debt problems.

The changes in circumstances themselves can be divided into two broad categories, those that were as a direct result of external forces beyond the control of an individual, stuff that just happens to people. This is in contrast to an individual consciously adapting or changing some part of their life.


Being ill and off-work, or not being able to work can also lead to debt, however, debt worries, anxieties and stresses can manifest as real physical illness, adding to the risk of and cycle of debt. It is essential for those with debt anxiety and debt stress to take effective measures such as meditation and /or participating in physical exercise.

Stress related illness can cause unemployment and lead to debt too.

Addiction to spend on unnecessary or non-essential items can also lead to debt. Individuals sometime maintain a pattern to spending even when they are fully aware that they are in debt. The psychological pattern of craving "new" or "latest" items is fast becoming yet other reason that contributes to debt problems.

Changes in employment or unemployment

This can be a major contributor to debt. Not having the opportunity for full time employment or addition to family that may impact not just the income but also the expenditure leading to debt.

Sudden expenses or even high bills can impact income resulting in emotional distress and physical symptoms such as sleeplessness or irritability as well as increasing the risk of debt.

Bereavement and separation from partner

Both bereavement and separation from partner can become factors causing debt problems. The emotional impact of losing a loved family member can sometimes cause an individual such distress that they are unable to continue with work or work for the same number of hours as prior to the event.

However, with separation from a partner can cause debt in several different ways, such as struggling to manage on a single income after living on a joint income. In some cases debts are felt with one partner after a separation.

Money management

Poor money management is amongst the most common causes of debt, with individuals either consciously spending money with the full knowledge that they are in debt or spend money when not realising that they were in debt.

A lack of care about getting in debt is also a contributing factor in poor money management.

Lack of money matter can also contribute to debt, especially when individuals are unaware of their benefit entitlements, specific allowances or special payments that may have assisted with any debt.

Being unaware of the levels of interest rates charged for missed payments can be yet another reason which can result in debt.

Creditor behaviour

Creditors misleading individuals by not telling them what they would have to pay when taking credit or loans can unexpectedly lead into debt problems, especially when individuals have budgeted against initial lower-rate repayments.

Some individuals find themselves in debt problems when they are wrongly billed for utilities companies or banks, and then facing a continuous struggle with the creditors in convincing them that the bill is incorrect.