Being in debt can be draining. Most of us have experienced the weight of debt building up and the stress of not being able to pay bills. We advise a lot on best navigating yourself out of unpayable debt with the best possible outcome. However, what do you do when the person in financial trouble is not you, but a friend, spouse or another family member? While you’re unlikely to be in a position to pay their way out of debt, there are effective ways to support and help them back into the black.
Firstly, how to know if your loved one is in unpayable debt.
Openly discussing financial woes can be too confronting, embarrassing or ‘improper’ for a lot of people. Therefore, we’re rarely wholly transparent about debt issues, to even our closest friends and family. However, there are indicators that someone is in financial distress, without them saying so.
Small changes which can indicate debt issues are:
- Their phone service is cut off due to unpaid bill
- Credit cards declining approval
- They’re borrowing small amounts of money, regularly
- They become defensive when the subject of money, or money repayment, comes up
- They’re selling things they’ve otherwise typically used or needed (furniture etc.)
Conversely, some signifiers reveal someone needs help to face their financial issues:
- They appear to be living beyond their means
- They keep upping their credit card limit
- The take out payday loans
- They have unrealistic expectations for how far incoming money will stretch.
Once you identify the signs, then some of the ways you can help them are
Offer emotional support
As much as debt is a money issue, it is also incredibly emotionally taxing. Simply becoming a sounding board to your friend or family member can make a huge difference. Breaking away the taboo of not talking about money is possibly your most effective tool to help them. Having a trusted ear to turn to can not only make them feel supported but will better assist them in facing the reality of their debt so that they’re more proactive in making moves to fix it.
Share your own experiences
The best way to eliminate feeling isolated with financial strain is to hear that others have gone through the same thing, and come out the other end. If you have had debt trouble, you can better empathise with their situation and make them feel less alone and more hopeful for an outcome. Sharing your experience can also extend beyond emotional support; maybe your experience demonstrates great tactics, contacts or avenues for getting out of debt that they can learn from.
Help them recognise that they have debt and need help
It can be uncomfortable and confronting, but using the listed signifiers you can establish a problem exists and bring it up with them. Not facing your debt problem is a sure fire way to have it never go away. Although you might initially be met with defensiveness and some hostility, you are doing them a great favour in facing things head on to begin the first steps to navigate out of debt.
Do some groundwork for them
It could be that the overwhelm of debt is stopping them from seeing possible solutions. While you can’t get them out of debt on their behalf, you can find out who they should speak to and assist with the steps to begin the navigation out of debt.
If you’re concerned about a friend or family member’s overwhelming debt, contact the experts at Shaw Gidley.
Shaw Gidley are experts in restructuring, turnaround and insolvency and provide free initial advice on these matters. Please contact our offices on (02) 4908 4444 or (02) 6580 0400.