Somebody you know is in debt - what should you do?

Debt is a difficult subject that many people don't like to discuss at all. So if somebody you know or love tells you that they're struggling with their unsecured debts (such as credit cards, store cards, overdrafts and personal loans), it can be hard to know how to react.

This guide aims to help - suggesting ways you can sympathise and/or help.

What to say

There isn't really a 'set' thing you should say when you hear that somebody is struggling with their debts. Debt problems can be different in many ways - and have a range of different causes.

It can be easy to assume that somebody is in debt because they just spent irresponsibly - and sometimes this is the case, since it can be easy to get carried away without really realising.

Often, however, it can be because of things out of their control, such as a breakdown in their marriage, illness, or losing their job. It could simply be because they're struggling to cope with the rising cost of living, and falling into debt problems gradually, over a long period of time.

So it pays to be understanding and sympathetic, and not to 'judge' them. Try to think of ways you could help rather than dwelling on how the person got there in the first place.

How you could help

It's important to check whether your friend/loved one actually wants any help from you - as sometimes they may have a plan in place already. They may just want a sympathetic ear.

If they actually want you to help them repay what they owe, however, there are a few things you can do.

For example, if you're more organised and 'money minded' than them, you could help them to work out a budget and figure out a realistic debt repayment plan.

Sit down with them and look at how much they earn each month, compared with how much they spend. Add up how much they pay each month towards essential costs, such as:

• Their mortgage/rent
• Council Tax
• Food
• Fuel/transport
• Essential clothing

Our budget calculator could help.

Once you've worked this out, you'll both be able to see how much they have left over each month - which they could put towards repaying their debts.

Encourage them to contact their unsecured lenders and propose this new, manageable payment. It's likely that their lenders will accept if they are shown evidence of how much your friend/loved one can realistically afford.

They'll then need to focus on sticking to this agreement until their debts are repaid. During this time, you could help them by keeping temptation away - for example, don't send them invites to expensive social events/holidays, etc.

Click here to see more ways that your friend or loved one could help themselves when it comes to their problem debts.

How we can help

You can help your friend/loved one if you feel confident about it, but it can be difficult and/or time consuming.

Sometimes, their debt problem might be more serious, and they'll need more help to get rid of their unsecured debts. In this case, you could encourage them to get professional debt advice and help.

For example, at Gregory Pennington we could help your friend/loved one set up a debt management plan. We'll help them set up their budget, deal with all negotiations with their lenders for them, distribute payments, and more.

First, they'll have to talk to us about their situation. If we can help, they'll have to commit to the new payment plan we help them agree with their lenders. If they start to struggle with their debt management payments due to a change in their financial circumstances, we could help by going back to their lenders and trying to renegotiate lower payments, if that looks like the best approach to take.

If their debt problems are more difficult to tackle, we could recommend a different debt solution that's right for them.

During this time, of course, you can help them by being supportive and understanding - but we'll be there to take care of the financial matters.

If you think we could help your friend or loved one, they could fill out the free debt solution finder on our homepage and one of our advisers will contact them to help them explore their options.

They can also explain the 'downsides' of repaying debt more slowly, such as the fact that it'll take longer to repay, can cost more in the long run, and can damage their credit rating.

Helen Gradwell