The current economic situation has many people looking for a financial solution that will provide them with a solution to their issues. It would be good to look for a long term solution to financial worries but there is definitely a need to focus on the short term problems. When people are struggling with money on a daily or weekly basis, it isn’t really possible to look into the future and create a plan for moving forward.

This is why people often turn to friends or family members to deal with debts and bills. A recent study, undertaken by Equifax, suggests that one in three people in the United Kingdom have borrowed money from people they know. This means that personal debt from family members is a growing issue in the UK and it could become a problematic issue.

It seems as though the key reason people required financial help from family members was to buy food and then next in line for reasons cited was a car repair bill or a utility bill. While it is good that people have folk they can turn to for assistance, this cannot be allowed to run on for a long time. Personal debt from family members can cause major problems and there a problems that arise from debts between close friends or relatives.

Do you have personal debt from family members?

A small financial debt that isn’t paid off or is overlooked can become a major issue for people, so it is best to deal with the issue in an effective way. When borrowing or lending money to a family member, it is best to draw up a legal agreement that sets out the terms and conditions of the loan. Without this sort of agreement in place, troubles can arise and people may end up falling out.

While no one is keen to see their friends or family members in financial difficulties, it is sometimes best not to provide loans or short term money offerings to a friend. The long term fall-out that can arise from the short term solution can be very harmful, which is why dealing with personal debt from family members is a very serious issue.

A better way to help someone you love deal with debt may be to act as a guarantor. Guarantor loans are a good option, with a more attractive rate of APR, and they provide a legal agreement straight away. If you want to help but don’t want to jeopardise a friendship, formalising the agreement is likely to be a smart move.