You might know someone who is in debt, whether that is a relative or a close friend. They could be struggling with anything from credit card debt to student loans or medical expenses. No matter what their debt is from, you likely care for them and want to help out.
The attorneys at Scura Law want to give you the resources for helping your friend or relative get out of debt.
Keep reading to learn more.
1. Know the Signs of Debt
Every debt issue is unique. However, financial problems often have similar red flags. For example, if your friend or relative says they don’t have any savings or can’t even save a few dollars each month, that is a problem. The issue is that they have put other things first, such as dining out, paying for subscriptions, or expensive phone or car payments.
If their credit card purchases are constantly declined, they may not know what their account balance is. If you see them going through a few cards at the cash register, that is a red flag. Another red flag is using car title loans, payday loans, or check cashing parlors.
2. Know the Emotional Relationships to Debt
People will not improve just because you point out their issues. They must be ready to make changes. One of the first stages someone in debt goes through is ignorance. They might not know that they are overspending and missing payments. Denial is the next stage. The individual is realizing the problem and trying to displace the blame or argue. They do not want to admit that they might be at fault.
Resistance comes next. They recognize that there’s a problem, but they feel overwhelmed. They might feel that they have gone this long by themselves and that it will be fine. Then, they will finally start to accept it. They may be afraid of failure and need your support. That’s when they can start to change.
3. Learn the Basic Options of Paying Down Debt
The options for debt repayment include debt cascade, avalanche, snowball, and landslide. Debt settlement is another option, and working with a bankruptcy lawyer can be good for severe situations.
4. Have a Serious Conversation
While you might think that approaching the topic lightheartedly is a good strategy, your relative or friend needs to know how serious it is. You might want to take them out to lunch or dinner. Then, make sure you tell them that you will keep everything confidential, even from your spouse.
5. Look for Realistic Steps
It is difficult to change, no matter where your relative or friend is financially. Help them think of what a future without debt might look like. You might know of a goal they have that requires them to save up some money.
In the future, you should be careful when you are asking how they are doing. You do not want to point out a failure. It is helpful to remind them of the emotional benefits of financial freedom, such as peace of mind.
6. Help Them Be Involved
No one wants someone to tell them how to live their life. Instead, consider being a resource. Instead of saying what you think they should do, give them different options and tell them the benefits and drawbacks of each one. Ask them which option they think would be the most effective. To promote an open conversation, try to avoid questions with yes or no answers.
7. Be a Supporter, But Don’t Bully
Before your friend or relative decides to change their debt spending habits, you should tell them that you’re willing to support them. You might offer to make some phone calls to help them acquire information about paying off their debt. Then, tell them what you’ve found and ask them what they think.
You should be careful to not be too intrusive, however. What you do for your young adult child will be different from what you do for a friend, however close they are. Being with your friend or relative through tough debt-ridden times is often overlooked and it can be a huge support for them.
Now is a great time to give encouragement to your friend or relative. Debt will not resolve on its own. If you think your relative or friend has a lot of debt, it may be uncomfortable for you to intervene. But if you act with sincerity and love, it might be exactly what they need to undertake their current situation.