The 6 Essential Rules to Follow if You're Helping Someone With Debt

By Susan


Last Updated: July 28, 2023


Are you helping someone with debt?

Do you have a debt-ridden child, a senior parent, a brother or sister, a client, or a personal friend or colleague?

It might be school loan debt, credit card debt, or old medical bills that have gone unpaid. You care about this individual and see that they require assistance, regardless of the source of the debt.

Perhaps you have realized you can't assist the individual yourself, but you're not sure how to recommend they get help or what kind of aid they might need. Here are six ways to help someone with debt.



1. Recognize the indications of a debt problem.

Every family is distinct. In the case of consumer debt, the same may be true. Household financial issues, on the other hand, tend to show similar indicators of danger that you should be aware of.

There are a few signs that should prompt you to go from moderate worry to taking the following actions on our list to assist you:

a. The individual claims to have no savings account and is unable to save even $10 each month.

The issue is that the individual has frequently delegated saving to instead pay for:

  • Streaming subscriptions
  • Eating out once or twice per month (or week),
  • A hefty vehicle purchase,
  • The latest phone, etc.

Even a $300 emergency savings fund would assist most families to avoid the threat of extreme consumer debt, unsecured loans, lease, and other costly options that arise when a device breaks down, a sofa breaks down, or a family member ends up in the hospital with a huge medical bill.

b. A record of denied credit card transactions suggests that the user is ignorant of their bank account in general.

One or two declines aren't particularly alarming, but if the individual goes through two or five cards at the counter, it's time to react and move on to the following stages.

It's time to start a dialogue to give help as soon as the person begins to use alternative banking solutions. Some examples to watch out for are:

  • Payday loans
  • vehicle title loans
  • rent-to-own services
  • check cashing services 

c. Has a family member or friend started working extra to make ends meet?

If you know they have debit card or student loan obligations, such conduct points to a desperate attempt to remain afloat financially.

It should go without saying, but it doesn't. If someone approaches you for a loan or monetary help, you should have a conversation with them about their financial situation.

If you see that a family member or acquaintance is putting off essential medical care, prescriptions, or vital operations, the reason might be because they are already saddled with large medical bills.

One may discover a slew of additional indicators that something doesn't "make sense" financially. If you genuinely care about the individual, convey your worry and your desire to be a resource and aid for them while they encounter and overcome financial challenges.


2. Determine your emotional attachment to debt.

Humans rarely change just because someone points out a problem, as they do with many other personal difficulties. To change, you must be prepared and emotionally invested.

Keep an eye out for the following stages that the individual may be passing through:

a. Ignorance comes first.

The individual may be completely ignorant that their excessive spending, credit card denials, and missing payments are even an issue. They may feel it is perfectly fine if they grew up in a family where this was normal.

Understanding the short-term and long repercussions of their conduct in comparison to the advantages of positive behavior will provide awareness.


b. Denial is the next step.

Whether this phase lasts a few minutes or a few decades, the person's mind is coming to terms with the truth of their detrimental views and actions throughout this period. At this point, arguing and accusing will be ineffective.

The ego of the individual is unwilling to accept wrongdoing. Instead, provide encouragement and trust in the person's capacity to solve the situation when the time comes.


c. Resistance is the third step.

During this moment, the individual acknowledges the problem in front of them, but they are overwhelmed since they have not yet discovered an acceptable solution.

As a result, they will continue to rely upon their abilities to fix the problem. They may also be afraid of unforeseeable futures that resound with dreadful terms like bankruptcy, insolvency, and unsustainable budgets.

Sharing success stories of others who have gotten out of debt through various techniques might help a person come to terms with their future success prospects.


d. Superficiality is the fourth element.

The debtor will downplay the relevance or likelihood of remedies working for him or her by using phrases like "I've made it this far," or "Our parents dealt with that as well."

At this point, all the individual needs is a constant reminder that though they battled to get back on track yesterday or went off the wagon this morning, it doesn't mean they can't succeed again.

At this stage, your helpful assistance might be as easy as stating, "It seems like you had a hard day." I'll be here for you if you'd like to attempt again tomorrow."


e. Acceptance is the fifth step.

Surprisingly, this stage might be the most frightening. Self-doubt and fear of failure will set in now that the person has recognized the problem and accepted the available remedies.

You may be of the most assistance by:

  • continually expressing your belief in his or her capacity to achieve
  • providing your support during difficult times
  • being accessible for them when they are concerned about getting off the debt-free road


f. Then, there's the application.

This phase requires action, whether the individual is repaying his or her obligations on his or her own or with the assistance of a third party.

To you, they may appear to be too preoccupied to spend time with you rather than even pick up the phone. He or she could be engaging with loan advisers or spending full evenings on the phone or speaking with creditors to figure out repayment plans.

If your time together suffers at first, try not to take it too personally. Your encounters may return to a degree of normalcy after the procedure is well underway. Just make sure you're not putting a family member or acquaintance in a situation where they'll be tempted to use a debit card.


3. Consider paying off your debt in one fell swoop for a fraction of what you owe.

Another way of helping someone with debt is to gauge if debt settlement may be the best solution.

Settlement implies the lender agrees to accept less than the full amount owing and to stop further collection efforts. This is a viable alternative if debt reduction is the primary aim and credit building or protection is not a concern.

You can resolve debts with your creditor over the telephone, or even via email. A frequent aim is to pay off half of your debt. Settlements are more likely to be accepted by collection agencies, however, credit card and medical debts are commonly included in settlements.

If you go with a third-party settlement business, you'll need at least $15,000 in debt and they'll charge you 15% or more of your payment as a fee. On the internet, finding reputable settlement firms is tough.


4. Prepare to have a serious discussion.

You could be tempted to take the issue of heavy personal debt lightly to spare the debtor any anguish or anxiety, but he or she must realize the gravity of the problem.

You wouldn't make a joke about suicide if he or she was battling with sadness rather than debt. Make no jokes about the misery of debt or the prospect of bankruptcy. If you don't, he or she will get the exact opposite idea of what you're trying to say.

You could find it beneficial to invite him or her out for a sit-down dinner or lunch to make your time together feel more official.

Taking the talk seriously also entails maintaining the confidentiality of the whole chat. Declare that you intend to keep everything private. If your sense of confidentially dictates that you will discuss the chat with your spouse, make sure you get their permission beforehand.

The last part of your preparation will be the most difficult.

Try to predict the other person's reaction.

  • Is he or she going to be confrontational?
  • If that's the case, what reasons do you think he or she would use to explain their conduct or reject your concerns?

Consider the specific replies you may provide. Keep emotional outbursts to a minimum. Consider particular behaviors that have bothered you and the clear consequences you've observed.


5. Assist in determining a feasible future.

Regardless of where someone is financially, intellectually, or emotionally, change is a challenging problem.

Your friend or close relative must discover the reason, will, and drive inside themselves to make genuine change. Adults will instinctively reject adult advice on how to live and what decisions to make.

Rather than telling a family member or friend what they should quit doing, assist them in envisioning a debt-free future. If you and your partner are close, you should be able to establish some major goals that will necessitate considerable savings.

Ask him or her questions that will help them realize on their own that their current conduct is keeping them from achieving their goals. But, when people come to such realizations, be supportive.

"That seems like a difficult behavior to change," you may reply, "but I know you, and I know you are powerful and able to achieve difficult things."

To avoid sounding like you're harping or pointing out failure, be sensitive when asking about his or her progress toward the financial goal in the future. It may be beneficial to remind your loved one of the emotional benefits that come with financial independence.


 6. Involve him or her in the development of the solution.

Your friend or family member, as previously said, does not want to be instructed how to live.

Consider serving as a resource instead of providing the answer. Present many alternatives, each with its own set of problems and benefits.

Instead of stating, "I believe you should do this or that," ask, "Which of these choices do you think will be most beneficial in your situation?" or "As you consider your future difficulties, which choice do you believe will be the best?"

Make a list of questions that will need reflection to answer before you begin your chat. Unless you're having trouble starting a discussion, avoid using "Yes/No" inquiries. As soon as you can, get away from them.



Helping Someone With Debt: Final Thoughts

No matter how you initially became aware of the indications of difficult debt, now is the moment to give encouragement and support.

Consumer debt is never going to go away. If you're worried that a family member or friend who has too much debt, is abusing credit cards or is otherwise on the verge of financial disaster, your intervention may be difficult and uncomfortable.

But if done with love and sincerity, it could be exactly what the person needs to get back on track and achieve his or her aims.

Editor's note: This article was originally published Oct 12, 2021 and has been updated to improve reader experience.

Photo by Ketut Subiyanto


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