How to help friends, family get out of debt

Juan Pinon, an electrical engineer in McAllen, Texas, struggled with credit card debt for years. It wasn't until he confided in his sister that he began to turn things around.

"It just so happened that one day I opened up to my sister, and she confessed to me that she had debt issues and was able to get out through professional help," Pinon says.

Getting a vetted referral to a nonprofit credit counseling agency and encouragement from someone he trusted persuaded him to take action. Pinon paid off about $50,000 in less than three years.

It's difficult to watch people we care about struggle with debt. As a close friend or family member, your influence can be powerful enough to spark change. Here are some tips on how to approach it.

Proceed with caution. Unlike Pinon, people with debt won't always raise the issue themselves. Bringing up someone else's personal financial matters can feel like overstepping a boundary. If you think it's important to intervene, be strategic about setting the right tone.

The first step should be asking if they're open to the conversation, says Kathryn Ellywicz, a marketing and communications specialist and former counselor at GreenPath, a nonprofit credit counseling agency. Giving them a choice may prevent them from feeling ambushed.

If they're willing to discuss their debt situation, speak kindly and withhold judgment. The conversation "needs to have a lot of grace, and it needs to be in an environment where the person feels relaxed," says Brandy Baxter, an accredited financial counselor in Dallas.

Respect their refusal for help. Your friend or family member might shut the conversation down. That's OK. Ultimately, you have to accept that it's their life and their decision. Let your friend or relative know you respect their choice and you'll be ready to help if they change their mind.

Share knowledge and resources. If your loved one is ready to dig out of debt, help them take the next step.

"Maybe you come together and say, 'OK, here's how I do my budget. Let's work on how you do your budget,'" Baxter says.

Not everyone feels comfortable letting their friends and family dig into the nitty-gritty details of their financial lives. So also come prepared with a list of trustworthy resources, such as online tools, nonprofit organizations and financial counselors.

Here's a start: The Association for Financial Counseling & Planning Education offers free virtual financial counseling and coaching sessions. If your loved one is struggling to pay bills or afford basic necessities, they can call 211 or visit 211.org to find local assistance.