A friend in need…what to do if someone you know is in debt

posted by in Living with debt

Don't let your friend suffer in silence any longer.

Don’t let your friend suffer in silence any longer.

You’ve known for a while now that someone you care about is going through a rough patch with money.

Their face is constantly tight with worry and there’s a stack of bills on their side table. You can’t have a five-minute conversation without their phone ringing, and every time it does they let out a world-weary sigh.

There could be a whole host of reasons why they’re struggling, some you may not even be aware of. Maybe they recently had their hours cut at work, or their partner walked out. Perhaps their household expenses have been creeping up in price over time (you no doubt know yourself how expensive things are these days). You want to help but don’t know how.

Our friends at the Money Advice Service (MAS) know how difficult it can be to watch someone deal with this kind of stress. That’s why today (Monday 19 June) they’re launching a week-long campaign called #talkmoneyworries, to raise awareness of the warning signs of debt, and how you can help your loved one put their difficulties behind them.

The symptoms of a debt problem

According to MAS, less than 1 in 5 people will seek out help with their debt problems. It often takes them hitting a ‘tipping point’ where something happens that makes things worse (such as an emergency expense or sudden change in circumstances). It’s at this point where the financial reality finally hits home.

If you suspect that your loved one may be in debt, keep an eye out for these 10 telltale signs:

  1. They’ve been in debt in the past. Debt is something that can be very difficult to fully escape from, especially if they had it at a young age
  2. They’ve had a recent life event that has resulted in a loss of income. Examples are childbirth, being made redundant, illness, divorce or bereavement
  3. They’re living beyond their means or over spending. They always seem to have the latest ‘must have’ items although they do not have the income to cover this
  4. They seem anxious, withdrawn or depressed. They’re not as eager to socialise as much and can seem distracted with their own thoughts
  5. They may seem more secretive and avoid talking about finances
  6. They’ve changed their spending habits, either by reducing spending (e.g. going on fewer holidays or eating out less) or overspending (spending without a plan for repayment e.g. putting luxury items on credit)
  7. They regularly go into their overdrafts, or take out further credit to cover monthly bills
  8. They seem tired or are having trouble sleeping
  9. Their weight has increased suddenly. When dealing with stress, we release a hormone called cortisol, which can result in the body storing more fat.
  10. Their weight has decreased suddenly. Anxiety brought on by stress over debt can cause a person to lose their appetite.

Man on laptopThese symptoms may seem easy to spot. However, a person in debt can often feel a great deal of shame, and a big part of feeling ashamed is learning how to conceal telltale signs that there’s a problem.

There’s rarely one, clearly visible, tipping point that makes a person struggle with debt. Rather, it’s often a mix of several, smaller symptoms.

So now that you’ve identified some of the telltale signs of a debt problem, let’s think about how you could give your loved one the support they need.

Penny for your thoughts?

Saying “I’m in debt and I don’t know what to do” out loud, even to someone you trust, can be terrifying. Look at your friend and the loved ones surrounding them –who is it they’re most likely to open up to?

Talk to a mutual friend or family member in confidence – make them promise to discuss nothing with the person in debt until you’ve figured out a plan of action together. You may find that this other friend has noticed the same things you have.

Safety in numbers

Your friend needs to know they’re not alone. Visit the Debt-Free Wannabe section of the MoneySavingExpert.com forums. There you’ll see plenty of people who need support in paying off their debts. You’ll be amazed how indiscriminate debt can be. Invite your friend to read some of the stories on there.

And if you want to gauge your friend’s reaction to getting debt advice you can make up a story about someone else you know having debt problems. Telling your friend that “Deborah from work was really struggling but got in touch with StepChange Debt Charity and now she’s much happier”, it might just encourage them to get in touch, even if they don’t tell you that they’re going to.

Never a borrower nor a lender be…

We don’t doubt that you want to help your friend, and chances are you’ve probably lent them the odd tenner every now and again. Resist the urge to lend any huge sums. Many clients who get in touch with us have fallen into debt because they sacrificed their own income in order to help someone they care about.

Turn on the TV and sooner or later you’ll be accosted by adverts encouraging you to be a guarantor on a friend’s loan. It seems simple, but few things tear friendships and families apart like money. If your friend is struggling now, chances are they’ll struggle to pay you back on time each month as well.

If a loved one asks you to be a guarantor on a loan for them kindly but firmly tell them no. Explain that you don’t want money or debt to ruin your relationship, and you have enough responsibilities of your own to deal with. This would be the perfect opportunity to suggest they get confidential debt advice.

How to get involved with #talkmoneyworries

If you’d like to help spread the word about the telltale signs of debt, keep an eye on the Money Advice Service Twitter and Facebook accounts this week and get involved. You can also sign up for their Thunderclap campaign.

Rachel Connor has been with the charity for over 8 years, starting in Helpline before joining the MoneyAware team in 2012. Rach enjoys travelling, video games, watching anime, reading and creative writing in her spare time (currently writing a Young Adult fantasy series). She had a previous life as head writer on Cartoon Network's Ed Edd n Eddy and as a copywriter for LivingSocial. She's also written comics and graphic novels for the animated series Regular Show.

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Tags Living with debt
  • Fredmoses

    A friend of mine is in debt for non payment of Council Rent, Council tax and has several other debts to friends, other people and companies. The total debt is only around £2500 to £3000 however to her it is a fortune. She has no chance to pay it off as she is now pregnant, single and on benefits. She has no concept of budgeting and is constantly asking for Crisis Grants. In dealing with her it is best to imagine you are dealing with an 8 year old who just lives in the moment with no concept of tomorrow. She has mental health issues however while she accepts she has a problem she will not seek help for this as she is afraid of the diagnosis (those of us who know her well tend to believe she has Emotional Dysregulation Disorder or as it’s better known BPD). Her problems mean she will not ask the Father of the baby for help so she is on her own. There seems to be nothing I or anyone else can do for her as the authorities, such as the Sheriff’s Office, just keep piling more pressure on her to pay & will not help her unless she gets a diagnosis from the Doctor – and she will not go to the Doctor! It concerns me to see her struggle with both her mental issues and her debt while knowing both are getting worse by the day, one condition not helping the other. She refuses help from friends with her budgeting and all the Council have done is give her a “financial advisor” which is at best a bad joke! She has been bailed out by friends and relatives 4 times in the past & does not need “advice” she needs someone to take control. I tried the “recommend a friend” advice however the response was along the lines of I can’t afford a £1 a week let alone £5! Apart from the usual “just be there for her” & “contact citizens advice”, does anyone have any idea who I could contact who may be able to help my friend before she is overwhelmed by debt?

    • Becca Drury

      Hello Fred

      I am very sorry that this is happening to your friend, and the distress it is also causing you. From the facts you have given me about your friend’s mental health issues and debt worries, she may be considered as vulnerable by creditors (the people she owes money to).

      You can read more about how to help a vulnerable person in debt on our website: https://www.stepchange.org/debt-info/dealing-with-the-debts-of-vulnerable-people.aspx

      If she is able to call us we can look at her financial situation in detail, and offer her a practical solution to her debt problem if there is one suitable for her. We also offer this service online through our ‘Debt Remedy’ tool which when completed, will show her what the best course of action is: https://www.stepchange.org/Debtremedy.aspx

      One thing to consider might be that she nominates someone to help with her debt problem on her behalf. Once she has called us or completely debt remedy online (and has a reference number) she can nominate a friend or family member to discuss the debts on her behalf, you can download a ‘letter of authority’ here which she would need to complete for you to do this for her: http://moneyaware.co.uk/template-letters-court-forms/template-letters/

      I hope that this information helps, if you have any more questions please feel free to come back to us.

      Thanks

      Becca

    • moneyaware

      Hi Fred,

      I’m very sorry that this is happening to your friend, and the distress it is also causing you. From the facts you have given me about your friend’s mental health issues and debt worries, she may be considered as vulnerable by creditors (the people she owes money to).

      You can read more about how to help a vulnerable person in debt on our website: https://www.stepchange.org/debt-info/dealing-with-the-debts-of-vulnerable-people.aspx

      If she is able to call us we can look at her financial situation in detail, and offer her a practical solution to her debt problem if there is one suitable for her. We also offer this service online through our ‘Debt Remedy’ tool which when completed, will show her what the best course of action is: https://www.stepchange.org/Debtremedy.aspx

      One thing to consider might be that she nominates someone to help with her debt problem on her behalf. Once she has called us or completely debt remedy online (and has a reference number) she can nominate a friend or family member to discuss the debts on her behalf, you can download a ‘letter of authority’ here which she would need to complete for you to do this for her: http://moneyaware.co.uk/template-letters-court-forms/template-letters/

      I hope that this information helps, if you have any more questions please feel free to come back to us.

      Thanks

      Becca