How to counsel individuals with significant indebtedness

Your Mindset as a Financial Advisor When Working with High-Debt Individuals

Back to Financial Advisor Resources

Back to Counseling Individuals with Significant Indebtedness

Preparation Checklist

Meeting Agenda

Resources/Handouts

As a pro bono advisor working with individuals who have significant debt, you have a unique opportunity to help people in challenging situations rebalance their lives. This is a special chance to help those who are facing the possibility of bankruptcy regain control of their financial lives. By providing them with basic financial information, you will be working to develop the essential skills high-debt individuals need to make solid, life-enhancing choices.

As you may know, high-debt individuals have either experienced unfortunate life events (loss of a job, a devastating lawsuit, a serious illness—any event that may have drained away their financial resources) or made a series of poor choices leading to their current condition. The very fact that these individuals have "been down" may mean that they are ready to turn to a new, more mentally and functionally healthful way of leading their lives. That they have chosen to seek help indicates their readiness for change.

Individuals with significant debt may think they'll never have enough money to live comfortably or that they don't deserve to have money now. They may wonder why they should even bother with trying to get out of debt. When they are at fault for making poor choices, they can get back on track by learning from their mistakes. You can turn those mistakes into valuable lessons and discourage them from beating up on themselves about the past and instead begin looking forward to a better future.

There are also some agencies available to help individuals with significant indebtedness. Your assistance in these situations, as a pro bono advisor, will be of most benefit when you can help these individuals to:

Prioritize a debt-repayment plan, indicating how much is owed and to whom.
Share practical ideas about how to control clients' money and organize their financial lives.
Demonstrate the value of planning ahead by building an emergency fund and learning to save.

To assist you in this process, NEFE has developed several resources for your use. These resources include a Meeting Preparation Checklist, a Meeting Agenda, and multiple forms, checklists and worksheets focusing on specific areas of need for clients with significant debt. The best place to begin planning your approach is with the Meeting Preparation Checklist.