Debt is one of those issues that doesn’t even have to affect you directly to affect your life. You may have all your finances in order, but if a close family member has a serious debt issue, you may feel obligated or may be asked to help. This type of scenario may seem straightforward, but it has the potential to cause some serious ripples, as well as financial problems for you if you don’t handle it with care.

Assess the Situation

When you first become aware of a family member’s financial troubles, your first instinct may be to find a way to “fix it” for them, but that isn’t necessarily the right thing to do. The wise move is to take a step back and assess the situation to figure out just how serious it really is.

Did they come to you asking for money? Are they just sharing information? Do you feel they are in a spot where they need a professional’s help? Take the time to figure out what the deal is before you take any action.

Create a Plan

Once you know their motivation and just how much debt they are talking about, it’s time to help them create a plan of action. If you have agreed to help them out financially, figure out a payment plan that they can follow and stick to in order to pay you back. If you’ve both decided that a professional help is in order, help them find someone who specializes in debt issues and helping people get out of trouble.

Offer Support

Let your family member know that you are there for them, anytime they want to talk about the situation, at any stage of the process. Your support doesn’t have to be financial to be valuable and appreciated. Debt problems are a stressful time for many people, so just knowing you’re there will be a big help.

Proceed with Caution

If you do decide to help financially, be careful. Let them know that you are going to be taking an active role in their financial life until things are straightened out. This means checking to ensure they are making their bill payments on time and creating a budget for them to follow.

It’s not totally uncommon for people to ask for family help, but then expect the family lender to stay out of their business while they take care of it themselves. If you’re going to help, insist on seeing all their financial information, and if not direct them to a financial expert who has a proven track record of success.