Home Mental Health & Well-Being Insights from Resolvly: The Psychological Cost of Debt

Insights from Resolvly: The Psychological Cost of Debt

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Debt is an inevitable part of modern life. While buying a new home or purchasing that car you’ve been eyeballing is a positive experience, drowning in debt and looking at a stack of bills you cannot pay is quite the opposite. Resolvly’s debt resolution experts weigh in on the severe psychological cost of debt and discuss what you can do to overcome it.

The resounding effects of debt

Unsurprisingly, dealing with large amounts of unpaid debt can wear you down. With that said, the far-reaching repercussions of financial insecurity may be more severe than you think. Some common impacts of unpaid debt include:


Stress and debt almost always go hand in hand. According to the American Psychological Association, a staggering 72% of Americans reported feeling stressed about finances. Nearly one in four characterized their stress level as ‘extreme’.

Stress has many definitions depending on who you ask. The bottom line is this: Excess stress is bad for you.

Financial stress can follow you like a malevolent figure lurking in the shadows. It can make you worry about the big things in life, like your job. Stress can also make you feel unshakeable guilt over minor things like ordering take-out instead of packing your lunch.


Denial is the polar opposite of stress. While consumers who are in denial about their dire financial situation may experience less stress than their counterparts, they are not handling the situation any better overall.

No matter how much you ignore your poor financial situation, debt will not simply go away. Eventually, all of those bills will come due, leaving you holding the bag. A denial of your financial situation can result in poor credit scores, legal actions, and even foreclosure on your home.

Fear and anger

If left unchecked, all that financial stress will eventually create much larger psychological problems. Ultimately, your stress will give way to a persistent sense of fear. This may be the fear of losing your home or having your vehicle repossessed. Living in a constant state of fear can also give way to bouts of severe anxiety or even anxiety attacks.

Ellen Diamond did her degree in psychology at the University of Edinburgh. She is interested in mental health, wellness, and lifestyle.

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