From a psychologist's point of view – how to show support to a person caught in a debt spiral?

From a psychologist's point of view – how to show support to a person caught in a debt spiral?

A person close to you fell into debt? Check what you can do and how to show them your support.  

Firstly: be kind but firm.

The environment of an indebted person who often fall into debt plays a crucial role. Relatives, of genuine care and desire to help, look for all possible solutions.

Usually they help by taking out more loans, hiding the actual scale of the problem, and constant comforting. Meanwhile these are mistakes which make the situation worse.

Although it is not always easy, it is far more effective to have an assertive conversation and propose a joint search for a real solution. It is worth to confront an indebted person with the facts crisply and without unnecessary emotions – by offering cooperation, e.g. in developing settlement terms or calculating the household budget. The sooner an indebted person realises that they fell into the vicious circle of debt, the easier it will be for them to break the spiral of further problems.  

Secondly: help in the development and consistent implementation of a plan of change.

Insolvency affects negatively all key aspects of life, while a plan of change must be applied to many areas of operation of an indebted person. The plan must be specific and realistic - its vital element consists in organising the relations with creditors - those physical ones (close friends whom you avoided) and official ones who lost their patience and have initiated formal procedures.

The first step is to honestly inform about the situation and make responsible declarations. Evasion and empty promises only exacerbate the lack of the debtor's credibility. The scope of further changes may be varied depending on individual situations. It should concern all areas whose consequences will be tangible and may cause discouragement and lack of actions. This concerns all types of case – starting from the family, profession, social, housing situation, through the change of consumption habits, concerning social life, free time, etc. Life with debts and gradual getting out of them is possible but it will always look differently than life on credit without coverage.  

A good plan is one thing, while its systematic implementation is an entirely different matter. Apart from a human, kind, and partner support, most people experiencing a financial crisis do not need special treatment, therefore it is easier to indicate the things they should definitely avoid instead of creating a list of recommendations.  

If you want to help an indebted person, avoid:

  • excessive, even emphatic compassion;
  • feeling sorry for them;
  • protecting them;
  • providing support on the verge of doing work for them;
  • accusing them;
  • blaming them;
  • criticising them;
  • arousing a sense of guilt and shame.

In the case of adults, debts affect self-esteem, the important element of which is the self-assessment of the financial situation. Assertive confrontation strengthens a tendency to escape, passiveness, and can even trigger aggression or claimant attitude in response.  

Thirdly: treat every problem individually and adjust your actions properly.

The reasons for falling into debt may be very different. That is why you should tailor your actions to every individual situation. Especially when the debt of your close one results from other difficulties, e.g. related to health, losing a job or excessive spending. In such situations we should most of all eliminate the cause of the problem. More serious cases are much more difficult, e.g. gambling addiction. In such a situation, if we really want to help this person, first we must discuss with them how to deal with the addiction.

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