Warning Signs Someone is in Debt

It's not always obvious that the people we love the most are struggling. That's true of physical health, mental, health, and financial health. In the case of debt and personal finance, it can be even harder to know when someone is in trouble. There's a lot of shame and stigma surrounding money problems, which can make it that much harder for people to ask for help when they need it.

It’s understandable to be concerned about a loved one who’s previously struggled with debt – especially if they’ve been inclined to try and hide their problems in the past. So how can you spot warning signs when someone's not willing to be open about what they're going through? 

Clear warning signs of debt problems

Everyone's experience with debt (and shame, for that matter) looks a little different, so the signs of a growing problem with debt will differ from person to person. That said, there are a few common signs that someone you care about is struggling with debt.

Receiving collection letters or phone calls

Here’s the part of the article where I remind everyone that you really shouldn’t be going through someone else’s mail. Stealing mail and tampering with mail are both felony offenses. And while there’s no law against taking a good long look at the unopened envelope of a letter addressed to someone else living in your house, you should always strive to do your best to respect the privacy of others.

That said, if you notice a loved one has started receiving letters from companies you can identify as collection agencies, that’s an indication they may be struggling with debt. If they begin receiving multiple phone calls a day that they either ignore or hang up on immediately, that could be a sign that someone is attempting to collect on an unpaid debt.

Spending doesn't match income

Assuming you have some sense of a loved one's financial situation, you can probably tell (without knowing all the details) when their spending seems out of line with their means. If you they make lavish purchases that seem well beyond what they can normally afford, or if you know for a fact that their income has dropped (or stopped outright) but they continue to spend as normal, those can both be warning signs that they're leaning on credit and creating debt.

Becoming evasive about finances

Personal finance can be a very personal subject. Quite a few people don't like to discuss the coming and going of their money. If you're concerned about someone's debt situation, what you're really looking for is a change in how they talk (or don't talk) about money. If they seem overly defensive about purchases or more closed off than usual, that may be a sign that something is wrong.

Continually asking to borrow money

We all hit hard times and there's nothing particularly odd or worrisome about a trusted loved one asking to borrow money to help them through a difficult time. Routinely asking to borrow money, however, is a major red flag. At the very least, continually asking for money suggests a major problem that needs to be investigated. 

If you have reason to believe that someone you care about may be struggling with debt, your best bet is to simply let them know that you’re there, that no one is judging them, and that help is available should they need it.

And if you think they might benefit from confidential, unbiased, and judgment free counseling, MMI offers credit counseling for free, 24/7, online and over the phone.