Orthonomics had an excellent, sensitive post about how difficult it is for religious people who are in debt to deal with being uable to give generously to others. it is in our nature and so painful and frustrasting to have to turn down even simple requests to donate to the school or shul, let alone being able to give to others who are in worse situations than our own.
SephardiLady also asks, "What should the Orthodox community be doing, if anything, to help its members avoid falling into debt in the first place, or deeper into debt?"
1. Rabbis and others in the position to give advice should not encourage (or even pressure) young couples to engage in lifestyle choices that will put them in seriously poor financial straits. My husband's rabbi (at the time we were married) knew that my husband would follow his advice and basically required him to continue in yeshiva. I questioned him on several occasions to find out how he felt we would be able to make it financially. His response was that when he was in yeshiva they managed to do fine. Then he admitted that he didn't know how and I should ask his wife. His wife's answer? Their parents supported them! If you put yourself in a position where you are giving advice that you believe will be followed, take responsibility for it.
2. When offering job suggestions, offer real suggestions. A minimum wage or part-time job with no beenfits will not support a frum couple, let alone a family. Those who are in a position to have connections (especially business owners) should make a real effort to reach out to hire people in the frum community to real positions. Rabbis should be going to their successful congregants to tell them to make these efforts. There are several major businesses here whose owners are members of local shuls and do not make any effort to help those who are looking for jobs.
3. There is a need in the community at large for more access to free loans. Speaking anecdotely from my own and other people's experiences, it is currently a very negative experience to ask for these loans to help get out of debt, and is often denied. (One person who went for help ended up with the agency calling his anti-Orthodox parents who lied baout him and the agency chose to believe them and deny him help.) This is halacha.
4. Something everyone can do - be supportive. Genuinely supportive. If you might be able to help them make connections, do so. (Just telling them a name of "someone who might be hiring" will probably not help them at all unless you are willing to make a follow-up call to the hiring manager or be listed as a reference. Even better if you can forward the resume with a note yourself.) If not, maybe you have other expertise that you can help them with. Or you actually have the means to help them financially with a loan. Or with other things they need - we certainly would not have made it at all without the generous boxes of clothing that continue to show up at our door for the kids. If not, at least be a sensitive person.