Helping someone else who is in debt?

Xenomorhic

Hi everyone

A close friend of mine, in her 30s, had had debt all her life. It's mostly credit card debt. When she was saying how much this has depressed her I persuaded her to take action and got her to look at this site.

It all seems to have gone over her head and she has no idea what interest she pays on her credit cards etc. She visited but she doesn't even know which card would be best for her to use.

I have asked to her to come over one evening and I will try and help her look at all the articles.

How can I break this down easily for her? She has a lot of credit card debt, a loan and a mortgage.

I guess we start by looking at each of Martins articles- they are always up to date aren't they?

Do I ask if she has any store cards and try to get her to cut them up?

She's a terrible shop a holic and addicted to holidays abroad. She's thousands in debt but went on holiday 4 times this year, soon to be going away again.

She has more clothes than she could ever wear- do I try and get her into Ebay selling.


I asked her to come and talk to all you lovely people but she's too shy and won't use forums. I have to be the go between. My problem is that I don't have my own house and so there are things I don't know much about, like mortgages and home insurance and things like that.

Any tips are greatly appreciated on how to get started.

Do I need to work on her you only live once so spend while you can attitude?

melaniec_2

I suppose you could ask her to bring all cards and the latest statement with her and a bank statement.

You could then put it all into the budget planner and this would be a wake up call when she see's it all written down on paper. This might just spur her into action.

from there you could draw up a budget if she's feeling up to it.

Molanole

I think the end result has to be that she takes responsibility for her own debt problems. Much as we all try there are so many examples on here of people trying to have other's lightbulb moments for them and it just doesn't work.

Perhaps begin with the usual SOA for her (with her alongside) and then she will see that we are a friendly bunch, that we don't judge anyone and help her over the course of a few posts to build up her confidence to post here by herself. Even if she lurks but doesn't post will be an improvement, it's the way that many of us built up the courage to post on here.

The starting point though has to be the SOA, even if it's not posted on here, she'll need to get to grips with exactly how much she does owe, listing her all her debts and the APRs. Once she's got her head around that I would perhaps show her the snowball calculator to show how long it will take her to clear her debt by just paying minimums.

It takes a personal lightbulb moment though to truly start dealing with the attitudinal changes required and get cracking on all the wealth of money saving info on here. You mentioned ebay selling which would be good but it takes effort and even the most committed DFW finds it hard to be motivated to do this sometimes.

Sorry, this all sounds so negative. I think what I'm trying to say is if you act kind of as the spokesperson for all us with your friend and encourage her to do all the things we encourage newbies to do that would be an excellent start.

Well done on helping your friend hopefully by encouraging and helping her the power of this site will speak to your friend. I wish you both all the very best of luck and hopefully we can welcome your friend very soon.

Mola x

clarab_3

possibly her looking at other people's stories in the forums might force a lightbulb moment? Sad to say that like so many more of us though, it mgight take something more personal, like not being able to keep up her payments, before it really hits home

Xenomorhic

Thanks for all your ideas everyone. I'll do my best on this one. I must admit we've even had rows in the past, because I wouldn't accompany her on holidays and shopping trips because of my cash situation ( been a student for years ) and when pressed I would occasionally query if she should be doing it either, and she'd get annoyed. I will have to tread a little carefully I think, but this is the first time she's asked for my advice, so there may be hope there.

I'll probably lift an example of how to process an SOA from here, and get her to fill it in for me. Good start, and then hopefully I can show you all what's involved.

I'll do my very best to get her onto this site!

in_over_my_head_2

I agree about the "lightbulb moment" - she has to realise how big a mess she's in.

For me, it was sitting down with a spreadsheet and writing down my income and outgoings - it wasn't a pretty sight... then I wrote down the true amounts owing on all cards and loans, and that sent me into total dispair for a few days... then I found this website, read a few inspiring stories, and started to pull myself together again

silvercar

I tried to help a friend whose outgoings are seriously above her income. Each year she transfers her credit cards to the mortgage and starts again. Now her mortgage company have said no (on affordability grounds) and her job is on the line. She is happy to talk about what she spends, but refuses to see that she could or should cut down. All I hear is "I NEED a new coat" or "aren't I ENTITLED to eat out". Her next step she says is to take secured loans. She bought her house 20 years ago so has equity in it which she thinks is her money to spend as she wants.

Didn't intend hijacking your thread, just wanted to say some people can't be helped.

climbgirl

As people have said above, it needs to be her realisation and her lightbulb moment. And I think to make this happen you need to use shock tactics a bit.

Pick something that's relevant to her - maybe she's trying to buy a house, you said she likes holidays and travelling. So add up how much she's spent on clothes/eating out or whatever for the past year and put that into terms that will make an impact to her. So "you've spent £2500 on clothes this year, that's a round-the-world plane ticket" for example.

You see what I mean though - show what her debt repayments or over spending on clothes could have bought her, in terms that are really relevant to her and it should ram the message home. I tried this tactic with my boyfriend and (I think!) he's taken it on board. Finally

Good luck! I think the old saying really is true here, you can lead a horse to water....

Verbatim

Or even, "It's not £2500, it's £2500 + compound interest. So if added up over the year those clothes have cost £xxxxx and you're still paying."

I presume she's not paying the cards off in full each month!!

skylight

I have tried to help out the in-laws and the BIL. I get the "what do you know" - ER HELLO!!!!! Been there, bought the t-shirt (for a discount of course!)

So - In-laws are ignoring the problem, BIL set up a DMP via Spectrum, who are now pushing him to go for an IVA he doesn't need (doesn't need Specturm either, but what do I know????? Spectrum are professionals aren't they? Just helping? And they know all the legal routes?? And becuase they are a business, know what they are talking about.

So I gave up. Don't care anymore. Not my problem. But I still get damn infuriated when MIL moans about her £400 phone bill this month (I kid you not!!) because she wouldn't take onboard some simple advice!

I agree with Climbgirl about Water and the Horse. Shock tactics may work with your friend and I really hope that it does! You will need to push her for a while though, but you need to know when to cut your losses and perhaps quit!

nearlyrich

I helped my friend sort out her debt, she was very close to meltdown, the reason she was in debt was due to circumstances beyond her control but it was getting worse because she couldn't see that she couldn't afford to keep living the lifestyle that she "deserved". And she was spending the same as she did before things changed.

We started with the black bin liner full of letters that she hadn't opened for months, worked out how much she owed and to who, she had a divorce settlement due that we used to offer full and final settlements to all the creditors. Some of them needed more thasn one letter but they all accepted about 45% in the end.

I urged her to open a new basic bank account as her biggest creditor was her main bank who she had loans and a credit card with.

She is now totally sorted with budgetting, transfers her bill money to a seperate account, transfers her "spending" money to a third account and only takes the card for this one out with her, has cut up all her credit cards and store cards and has given up smoking because she can't afford to smoke and run a car and she needs the car more than the ciggies.

I agree people have to have their own lightbulb moment and it can be very frustrating when they keep spending on stuff they can't afford but stick with her you might convert her yet.;)