How to help a loved one with debt problems?
Helping a loved one or a friend who is facing financial difficulties requires empathy and a lot of care. Money problems are, as you can imagine, a source of stress, and it is important to offer moral support without judgment. This article suggests several ways to help a loved one dealing with debt problems, with the primary goal being to find solutions tailored to their needs and situation.
What are the signs of financial difficulties?
There are several warning signs of financial difficulties. Whether it’s a partner, a friend, or a relative, the following signs are often observed when it comes to debt problems:
- Changes in habits: A friend in debt may stop doing activities they once enjoyed, like going to restaurants or traveling. They are more careful with their spending.
- Selling personal belongings: A loved one with debt might sell valuable items they wouldn’t normally part with, such as a car.
- Extra work: A heavily indebted person may be open to working extra hours or seeking a second job.
- Change in attitude: A person in debt may appear more stressed and may feel embarrassed or avoid participating when you talk about money or expensive activities.
- Relationship issues: A friend in financial trouble may likely ask a family member for help, often causing disputes and tension in their relationship or family.
By detecting one or more signs of debt, having an open and honest conversation with your indebted loved one can allow you to offer support for their debt problems.
How to bring up the topic of financial issues with a loved one?
Bringing up a loved one’s financial problems requires tact and sensitivity. Money is often a taboo subject, so it is important to be open and thoughtful to preserve the person’s dignity. Here are a few tips for opening up the discussion:
- Choose the right time: Pick a quiet, private moment when you can talk without distractions.
- Be empathetic: Express your concerns kindly, for example: “I’ve noticed you seem stressed lately. Is everything okay?”
- Avoid judgment: Be understanding without criticizing or blaming, to maintain a positive atmosphere.
- Offer support, not solutions: LIsten without offering advice, as they may simply need someone to listen.
- Suggest resources: If your loved one is receptive, direct them to debt professionals, like those at Jean Fortin & Associés.
The goal is to make sure your loved one is comfortable discussing his situation with you.
My friend is asking me for money, what should I do?
Now that your friend has opened up to you about their debt issues, they may talk to you about late payments, the total amounts they owe, or even about harassment from creditors. They might also ask to borrow money to help alleviate their financial burden.
Your first instinct as a friend or family member may be to say yes! But giving $2,000 to cover late payments when they owe $20,000 will only postpone the problem. Usually, the person facing financial difficulties will ask for the bare minimum, as few people want to take advantage of a friend or family member. However, borrowing money to make just a few payments is simply buying time and does not address the root of the problem. New financial needs are likely to come up after a few months, or even a few weeks.
Before agreeing or refusing to lend money to a loved one, we recommend reading our 10 tips to guide you in your decision to financially help a friend.
Solutions to help someone in financial difficulties
Once the conversation about debt problems has begun, several solutions exist to help a loved one make sound financial decisions. Providing support can start by sitting down with them to:
- Set up a budget.
- Develop an action plan to pay off their debts.
- Accompany them, if necessary, to seek help from a professional in insolvency.
As we know, money issues are very delicate topics when it involves loved ones. You can provide the person in need with moral support, valuable advice, and ongoing assistance. As for financial aid, it should ideally be limited to essential needs and only when there is no other option.
Finally, even in the worst situations, never lend money if it risks putting you in trouble. Otherwise, you will have not one, but 2 people to save!
By Pierre Fortin
Jean Fortin & Associés
Personal Finance Advisor
Licensed Insolvency Trustee
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