What Can You Do If Someone You Love Has Serious Debt Problems

If someone you love has serious debt problems, it can be both infuriating and heartbreaking, but knowing how to address it can lead to a breakthrough for your loved one.

Some of the following steps may help you help them.

Ultimately, breaking free of the debt cycle is up to the individual, but you can be there to support them as they combat their debt and high interest, and get back on their feet again.

First, how do you even know if your loved one, whether it be a family member or friend, is in debt?

Here are some of the signs that may surface as the loved one struggles with debt problems:

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Get to know the warning signs of debt

A lot of people you know may be in debt, but it might not be readily apparent.

Most people don’t wear a flashing sign that says, “I’m in debt.”

Some of the warning signs of debt may include the following:


  • If your loved one seems depressed or anxious, this may be a sign of debt. Being in debt is incredibly stressful, so they may not be sleeping as well, and could even start skipping things like exercising due to the stress. This one sign is not enough to assume a loved one is in debt, but you may want to speak with them about their mental health if you notice they seem down or anxious.
  • If they are making excuses to suddenly stop socializing, it could be that they can’t afford the outing, or could simply be so stressed from the debt that they don’t feel up to socializing because they’re trying to avoid talking about themselves.
  • A major red flag is if they seem to be living beyond their means. If you have a guess at how much income your loved one is bringing in, but seems to have the most up-to-date clothing, technology, and so on, this could definitely mean they’re in debt.
  • Finally, if they ask to borrow money, this is a big sign. When someone asks to have money lent to them, they are very likely going through some debt problems. This is also a great conversation starter though if you’ve had doubts up until this point.


Your next step is pretty straight-forward, but might be the most challenging of them all.

Talk to them about their financial problems

It’s time to open up and ask them if they are dealing with financial stress.

Make sure when you do this that you leave your judgment at the door, or they are less likely to open up about what problems they are experiencing.

Have you ever cringed when you heard someone ask, “how much did you pay for this?”

If you have, you realize there’s a social faux pas about inquiring about finances.

This is true even in the best financial situations, so it can be quite difficult to talk about debt.

If a loved one is in severe debt, they are unlikely to bring it up themselves.

Instead, you’ll need to be the one to bring up the conversation.

Don’t ask for every detail when you bring up your judgment-free conversation; instead, try to get a grasp on how you can offer help with details they offer up.

In fact, this conversation may turn in to a series of conversations as they learn you’re not trying to judge their lifestyle but help them instead.

Unless you’re a financial expert, don’t offer direct help.

(Offering money, for example, will not help them deal with their debt, but simply have them rely on receiving money from you.)

Let them know they don’t have to do this alone

Just opening up the conversation is important, but actually seeking help is going to be incredibly important for them.

When trying to get out of the debt cycle, it’s very hard to do it alone.

So let them know that while you’re here for them, there are other people to help as well.

Many people have suffered through immense debt, only to come out stronger on the other side.

They simply aren’t alone in dealing with this debt, so make sure they know that.

When people are in debt, it can feel incredibly isolating.

Offer your assistance in finding financial help

One of the effects of severe debt is the ultimate paralyzing fear of dealing with it.

You should not be the one to rescue them, but you can help lead them to help.

When you’re having your conversation with them, ask them how you can help.

Avoid offering money, but instead, offer assistance trying to find a great debt counselor or someone to help outline their budget for them.

Offer assistance like explaining how their interest rates work, explaining how to create a budget they can stick to, or suggest researching alternative ways to reduce their debt so they can breathe easily again.

Nobody has everything figured out, so use yourself as an example.

If you are great with finances but struggle with other areas, remind them of that.

Nobody has it all figured out, but it can feel like you may be attacking them if you’re not careful.

You may want to seek out resources before you broach the subject of debt with them so you can have them ready when they inquire.

If they are ready, help them make an appointment with a licensed insolvency trustee or debt counselor.

Don’t lend your loved one funds

Finally, and this one is incredibly important for you, don’t lend them money, especially large sums.

It will likely not be returned.

Additionally, it’s a short-term fix that does not directly get to the bottom of how they got into debt.

It can “feel” like the right thing to do is lend them money, but it isn’t.

Instead of letting your loved one have your money, try navigating them towards finding real debt solutions.

They can contact us at Bankruptcy Canada if they need to seek out a trusted financial expert, with a no-obligation initial consultation.

Information on Consumer Proposals

Consumer Proposals in Canada – An Alternative to Bankruptcy
What is a Consumer Proposal?
How to Amend a Consumer Proposal
What are the Benefits of a Consumer Proposal?
What are the Steps in a Proposal?
Consumer Proposal Eligibility
What Debts Are Erased in a Consumer Proposal?
Is There Life After a Proposal?

Canadian Bankruptcies

How to File for Bankruptcy
What is Bankruptcy?
Bankruptcy FAQs
How Does Bankruptcy Work?
What is the Cost of Bankruptcy in Canada?
How to Rebuild Credit Following Bankruptcy
Personal Bankruptcy in Canada
What Debts are Erased in Bankruptcy?

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