How to help an indebted person?

Financial problems may happen to anyone and concern an increasing number of people. Often indebtedness is a reason for shame and leads to a situation when, due to fear of the reactions of the closest environment, it is difficult to share your problems with others. Usually relatives and friends learn about it rather late, when there is much more difficult to provide help. How to support a person who does not know how to handle their debts?

 Often indebted persons do not tell their relatives about financial problems wanting to protect them against this unpleasant topic and its consequences. Meanwhile, support from family or friends may turn out to be key in the process of getting out of debt. That is why, when someone close or a relative has financial problems, offer them help in taking active measures.

The persons who managed to get out of debt admit that all positive changes in their lived started when they stopped tolerating their debts and took active measures. Such a breakthrough in the way of thinking gives strength in the fight against indebtedness. Helping your close ones is very important as sometimes simply a conversation with the other person is sufficient to look at a situation from a completely different perspective. An honest conversation is also a very good way to "disenchant" the topic and overcome shame.

First step.

The first thing we have to do is to carefully analyse the situation of the indebted person. It will be easier for us because we will look at it with a distance. Remember not to belittle but also not to exaggerate the scale of the problem and to create a realistic action plan. A simple operation which is making a list of all liabilities and expenses and compare them with income will enable you to make an objective assessment of the situation. This way you can calculate the amount of instalment possible for repayment. An indebted person is often not aware of the amount of their debt. Such a visualisation and joint organisation of all matters - although not easy - enables not only to see the scale of the problem but also facilitates finding a solution to the problem. Also, let the person having the problem simply spill their guts. It is possible that it the first time they share their problems with others. However, do not allow a situation when the person who confines in you seeks only external reasons, puts blame for their debts on others, etc. It is important to make the indebted person realise that a way out of debt is to accept it and understand than no one else can solve this problem for them. We can support them in their further actions.  

How to motivate?

At this stage it is very important to change the way we perceive the debt problem. Although it is difficult, it is good to try to turn off the emotions. Indebted persons often feel guilty because of the situation and lose self-confidence. Such an attitude prevents them from taking positive steps. In such situations, it is a good idea to tell the indebted person similar stories with a happy ending. Someone else's history very often allows to discover similarities, regain confidence, and also motivate to take action.  

Contact with the creditor is key.

An important element of the changes is to organise the relations with creditors (i.e. the persons or institutions whom the indebted person owes money). The first step is to honestly inform about the situation and make responsible declarations. First of all, it is good to explain to the indebted person that avoiding contact or making empty promises only makes the situation worse and reduces the chances to settle the case amicably. Therefore, it is important to motivate an indebted person to act and overcome reluctance to contact and talk to the creditors. For an indebted person, talking to a debt management company on an amicable basis is the most favourable solution. Yet not everyone is aware of that. When you reach an agreement you avoid additional and unnecessary costs (e.g. interest) and court or enforcement proceedings. Therefore, it is best to contact and ask to split the debt into instalments as soon as possible.  

Assistance of specialists.

If we are not able to help and indebted person ourselves, it is possible to contact institutions which specialise in providing assistance to debtors. Such activities are often conducted by Municipal Social Welfare Centres and organisations specialising in this specific area, e.g. the Society for Promotion of Financial Education. The Financial and Consumer Advisory Centres led by the Society provide free and confidential assistance within the scope of financial, legal, and consumer advisory. In Poznań there is the Debtors Support Programme Association where you can seek psychological advice and participate in therapy.